Wholesaling Real Estate in New York: Contract Assignments, Double Closings and What Title Requires

No New York law bans wholesaling or licenses it by name. Wholesaling means signing a contract to buy a property and then passing the deal to an end buyer. You either assign (transfer) the contract or do a double closing, also called a simultaneous closing, where you buy and resell. The legal risks come from the broker licensing law, the contract itself, transfer taxes and deed fraud protections. This guide covers those rules statewide, with New York City notes, and what title asks for at closing.

Is wholesaling legal in New York?

As of October 30, 2026, we found no enacted law that regulates wholesalers by name and no Department of State (DOS) guidance on wholesaling. We also found no reported New York appeals court decision on whether assigning your own purchase contract counts as brokerage. Pending bills are covered below.

Instead, the answer turns on how New York defines a real estate broker: someone who, “for another and for a fee, commission or other valuable consideration,” lists, sells, buys or negotiates a sale of real estate. Doing that without a license is barred.

The words “for another” draw the line:

  • Buying for yourself. A wholesaler who signs as the buyer, holds an enforceable contract and sells that contract is dealing in its own interest. Wholesalers rely on this. It is a reading of the law’s wording, not a ruling we could find in a New York case.
  • Marketing someone else’s property. Advertising a house you have no contract on, or collecting a fee for matching a seller with a buyer, looks like acting “for another.” That is brokerage.

Unlicensed brokerage is a misdemeanor prosecuted by the Attorney General. A person harmed by it can recover one to four times the money received. An unlicensed person also can’t sue to collect a commission. In a 2024 appeals court decision, the court upheld revoking a broker’s license, partly because the broker used unlicensed people to recruit homeowners. It is not a wholesaling case, but it shows DOS enforcing the license law against programs that solicit homeowners.

Limits on soliciting homeowners in parts of NYC

State law lets DOS issue nonsolicitation orders and create cease and desist zones. Homeowners in a zone who register cannot be solicited to sell. The rules bind brokers, salespeople and “other persons regularly engaged in the trade or business” of buying and selling real estate, which reaches unlicensed wholesalers.

Zones have covered parts of Brooklyn, Queens and the Bronx. They expire and are renewed on their own schedules. Check the DOS homeowner complaint page and current DOS notices before any mail or door-knocking campaign.

Pending bills (not law)

As of October 30, 2026, we found no pending New York bill that regulates wholesalers by name. The closest bills are narrower:

  • S574-A, the “End Predatory Home Flipping Act,” would add a NYC tax on resales of one- to three-unit homes within two years: 65% of the gain in year one and 50% in year two, with exemptions. It was amended and sent back to the Senate Cities 1 committee on May 14, 2026.
  • A5881-B would create a new cease and desist zone in Brooklyn’s 56th Assembly District. It passed the Assembly and went to the Senate Rules committee on June 4, 2026.

The 2025-2026 legislative session ends December 31, 2026. Bills not passed by then die.

How a contract assignment works

The wholesaler (B) signs a contract with the seller (A), then assigns it to the end buyer (C) for a fee. C closes directly with A, and A deeds the property to C. B never owns the property.

The contract has to allow it

New York law doesn’t prohibit assigning a purchase contract, but the standard contract usually does. The widely used Residential Contract of Sale (form 11-2000) says: “This contract may not be assigned by Purchaser without the prior written consent of Seller in each instance.” An assignment made without consent “shall be void” (form copy). A wholesaler needs a rider (added terms) that permits assignment, or the seller’s written consent at the time.

The assignment must also be a signed writing.

What title will ask for

The title company insures C, who gets the deed. Expect it to ask for:

  • the original contract, every rider, and the signed assignment in which C takes over the contract;
  • the seller’s written consent, if the contract requires it;
  • a closing statement showing the assignment fee, which is how lenders and the transfer tax returns see what C actually paid;
  • approval from C’s lender. Many lenders won’t fund an assigned contract, and an FHA-insured loan can’t be used when the deal involves a sale or assignment of the purchase contract.

Transfer tax on the assignment fee

New York State taxes the assignment itself as a transfer of real property. State tax law lists assignment as a form of transfer. It counts “an option or contract to purchase real property” as an interest in real property, and counts payment for a contract as consideration (the price paid). State tax rules say the price under the assigned contract is not part of the consideration for the assignment.

In practice, the assignment fee is what gets taxed. The TP-584 return, the state transfer tax form filed with the deed, has a “Contract assignment” box for it. The tax applies when the consideration is more than $500 (tax law). The exemption for signing a contract covers signing one without taking occupancy, not assigning one.

New York City is less clear. The NYC Real Property Transfer Tax (RPTT) applies to deeds and to transfers of economic interests, and the City’s code doesn’t address contract assignments directly. In a 2004 Department of Finance letter ruling on an assigned co-op loft purchase, the City treated the so-called assignment as a sale of the shares. It taxed what the assignees paid, including the assignment payment. A letter ruling binds only the party that asked for it. Confirm the City treatment with the closing attorney before pricing a NYC deal. The state guidance also doesn’t say whether the fee is added to the price for the mansion tax threshold. See NYC and NYS Transfer Tax for rates.

How a double closing works

In a double closing, B actually buys from A and then sells to C, usually the same day. There are two contracts, two deeds and two sets of closing papers. A and C need not see each other’s price.

Two sales, two sets of taxes

Each deed is a separate transfer with its own taxes:

Item A to B deed B to C deed
NYS transfer tax On A-B price On B-C price
NYC RPTT (in NYC) On A-B price On B-C price
Mansion tax ($1M+ residential) B pays if applicable C pays if applicable
Recording fees Yes Yes
Title policy B’s, if B buys one C’s owner and loan policies

The state transfer tax is owed by the seller, so B pays it on the second deed. If B borrows to buy, that mortgage carries mortgage recording tax too (see Mortgage Recording Tax).

Where title gets cautious

Underwriters (the title insurance companies that back title agents) look hard at quick resales because they resemble mortgage fraud patterns. Their rules vary by company, so this is common practice, not law:

  • Paying for the first closing. The A-to-B purchase has to be paid with B’s own money or a transactional loan. Using C’s money to pay A before B owns the property is what underwriters most often restrict or require approval for. Ask the title company in advance, in writing, how it handles same-day funding.
  • Underwriter approval. Many title agents must get underwriter sign-off on a back-to-back sale, especially with a large price jump or a new lender on the B-to-C sale.
  • Telling C’s lender. Lenders generally want to know about the earlier transfer and price. An FHA loan can’t close if B has owned the property 90 days or fewer, counted from B’s closing date to the date of C’s contract (federal rule). Many conventional lenders have their own waiting periods.
  • Recording order. Both deeds must be recorded in order. The title report on the B-to-C sale will list the A-to-B deed as an item to clear until it is recorded or handed over at closing. See Title Search and Title Report.

Deed theft and distressed sellers

New York’s deed theft laws weren’t written for wholesalers, but they affect wholesale deals more than most:

  • Presumed notice of fraud. Since December 2023, when mortgaged property passes between unassociated parties, the buyer or lender is presumed to have had notice of fraud. Associated parties are mainly close family and the owner’s own trust or LLC. The presumption does not apply if the transfer comes with a recorded statement from the mortgage lender that the debt has been paid off or taken over by someone. Where it does apply, the buyer or lender can try to disprove it with evidence. On a wholesale deal with a distressed owner, make sure the seller’s mortgage is paid off at closing and the satisfaction (the lender’s release) is followed through to recording. New York Deed Theft Law for Practitioners covers this in detail.
  • Home equity theft law. This law can apply if the seller lives in a one- to four-family home and is in foreclosure, two months or more behind on the mortgage, or on a tax or utility lien sale list. It requires specific contract language in large type. The seller has until midnight of the fourteenth business day after signing to cancel. Until then, the buyer can’t record anything the seller signed, transfer the property, put a lien or mortgage on it, or pay the seller. Intentional violations can be a felony. The law does not cover someone who buys the home to use, and does use, as their primary residence. It also does not cover a later good-faith buyer who pays for the home and had no notice of the seller’s rights or of a violation of this law. A wholesaler planning to resell is not excluded.

Recording the wholesaler’s contract

A wholesaler can record a memorandum of contract (a short public notice that the contract exists) under state law. It protects the wholesaler against a later buyer from the same seller. The recording is effective only through the thirtieth day after the closing date set in the contract. If the deal dies, it clouds the seller’s title until it lapses or is canceled, which is why sellers’ attorneys resist it.

Details for attorneys and title professionals

  • Contract form. The anti-assignment clause is paragraph 26 of Residential Contract of Sale form 11-2000, jointly prepared by the New York State Bar Association Real Property Section, the New York State Land Title Association and two New York City bar committees. Newer editions may renumber it.
  • Title documents. The assignment document title asks for is usually an assignment and assumption agreement.
  • Equity purchaser exclusions. Under the home equity theft law, a buyer of a primary residence and a bona fide purchaser or encumbrancer for value are excluded from the definition of “equity purchaser,” the law’s term for someone who buys from the distressed owner. The statute defines the second group as good-faith buyers or lenders who deal with the equity purchaser (not the distressed owner) for value and without notice of the seller’s rights or a violation. The law lists other exclusions too, such as buyers at a foreclosure sale.
  • Title report. Until it is recorded, the A-to-B deed appears on the B-to-C title report as a raised exception.
  • S574-A is sponsored by Senator Salazar.

Official sources

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Korvane Title is preparing to launch in New York. It is not licensed as a title insurance agent and does not accept title orders. Content on this site is general information, not legal advice.