Many homeowners in Philadelphia receive repeated calls, letters, and visits from “We Buy Houses” residential property wholesalers offering cash for their homes or other property they own. Often, these wholesalers target people who are going through financial hardship and use high-pressure tactics to convince homeowners to sign agreements for their homes. They also target homeowners in neighborhoods with rising home values, especially in Black and Latinx communities.
These wholesalers often offer far less than the actual value of their property. As a result, long-time homeowners lose valuable wealth and family homes are lost. On December 1, 2020, Mayor Kenney signed a new law that curbs the worst abuses in this industry. The law has several parts.
Do Not Solicit List
As part of the new law, wholesalers are now prohibited from contacting homeowners who announce that they do not want to receive home purchase offers. To help homeowners announce that they do not want to be contacted, the City created a Do Not Solicit list.
What counts as “soliciting”?
Any communication where a wholesaler offers to buy your house counts as soliciting. This may be in the form of phone calls, texts, mailings, or even in-person visits.
How do I sign up for the list?
Homeowners who do not want to be contacted by wholesalers can now sign up for the City’s “do not solicit” list here or by calling 215-686-4500.
What if I don’t want to be on the list, but one wholesaler is bothering me?
Being on the list is just one way to announce you do not want communications from wholesalers. You can also inform any wholesaler or wholesalers directly, preferably in writing, that you do not want them to contact you again.
What if I am on the list, but a wholesaler contacts me anyway?
Wholesalers who violate the Do Not Solicit part of the law are subject to fines of up to $2,000 per contact. You can file a complaint with the Philadelphia Commission on Human Relations here or by calling 215-686-4670.
Licensing
- Residential Property Wholesalers are now required to be licensed by the City of Philadelphia.
- Wholesalers who are licensed are required to follow ethical guidelines and provide clear and accurate information to homeowners. To see if a wholesaler is licensed, you can search this website.
- A homeowner who signs an Agreement of Sale with an unlicensed wholesaler may cancel the Agreement at any time before closing.
- For more information on how cancel an Agreement of Sale or if you think a wholesaler is not acting ethically, contact Community Legal Services at 215-981-3700.
Homeowner Bill of Rights
Many homeowners who sell to Residential Property Wholesalers do so because they think they do not have other options, especially if the home is in mortgage or tax foreclosure or needs repairs. Homeowners who want to sell their homes are often not aware of how much their home is worth, especially after a dramatic rise in home prices in recent years.
Wholesalers now must provide a document with any offer to buy a home at least three days before any Agreement of Sale is signed. That document gives important information to homeowners about City programs to help homeowners with tax, mortgage, repair, and other homeownership problems. The document also encourages homeowners to do independent research about what their home might be worth before agreeing to an offer from a wholesaler. You can see the entire document here.
If you or someone you know is considering selling a property because of taxes, mortgage problems, or repair needs, the Save Your Home Philly Hotline may be able to help. Call the Hotline at 215-334-4663 to see if any relief programs can help you.
Media coverage of this new law:
Inquirer Editorial Board, “Editorial: Philly’s new homeowner protection law is a useful tool for neighborhoods facing gentrification,” Dec. 2, 2020, Philadelphia Inquirer.
Kate Dugan and Tonnetta Graham, “‘Opinion: We buy houses’: Philly Council targets real estate scammers with bill,” Nov. 18, 2020, PlanPhilly/WHYY.
Jacob Adelman, “New city law aims to crack down on real estate ‘wholesalers,’ seen as exploiting underinformed property owners,” Nov. 19, 2020, Philadelphia Inquirer.
Taylor Allen, “Wholesaler or huckster? Philly Council passes bill to curb real estate scammers,” Nov. 19, 2020, PlanPhilly/WHYY.
Michael D’Onofrio, “City Council approves homeowners ‘do not solicit,’ sends bill to Kenney,” Nov. 19, 2020, The Philadelphia Tribune.
