Why State Laws Matter When Marketing Off-Market Homes
Learn how to legally marketing off-market properties, with deep dives into common pitfalls, compliance strategies, and best practices.
Zach Fitch
Tennessee
, Goliath Teammate
Off-market deals are the backbone of many investors’ acquisition strategies.
But when it comes to marketing those properties, especially if you’re wholesaling, there’s a fine line between legal, ethical practices and crossing into territory that could get you fined or worse.
Each state has its own rules, but the principles are the same: you must stay compliant, clear, and careful in how you present deals.
This expanded guide lays out the general framework for legally marketing off-market properties, with deep dives into common pitfalls, state-specific issues, compliance strategies, and best practices to protect yourself.
What Counts as “Marketing” an Off-Market Property?
Marketing to Sellers: Advertising your services to distressed or motivated sellers. (e.g., “We buy houses as-is.”) This is usually legal, provided you aren’t misrepresenting services.
Marketing to Buyers: Advertising a contract or property to potential cash buyers. This is where legality gets tricky. If not done correctly, it can be construed as unlicensed brokerage.
Why This Distinction Matters
Marketing a service is different from marketing real estate. The former is about lead generation. The latter can cross into licensed activity unless you own or control the property.
The Core Legal Issue: Assignment vs. Brokerage
Assignment Marketing: If you have a property under contract, you are allowed to market your contractual interest (the right to assign your position in the contract).
Brokerage (Illegal Without License): Marketing or advertising a property you don’t own or control, especially if it looks like you’re selling the house itself.
Safe Practice:
Always market the contractual right to purchase.
Use disclaimers: “This is a contract for sale and assignment of equitable interest.”
General Best Practices for Legal Marketing
Have a Signed Agreement First
Never market a property you don’t have under contract.Market the Contract, Not the Property
Wording matters: “Assignment of Contract Available” instead of “House for Sale.”Use Buyer Lists, Not Public MLS
Build a vetted cash buyer list and market privately.Disclose Your Position
Make clear you’re selling your contractual rights, not representing a seller as an agent.Stay Transparent With Sellers
Sellers should know you may assign the contract.Avoid Misrepresentation
Don’t pretend to be an agent if you’re not licensed.Keep Records
Save copies of your ads, disclaimers, and signed contracts to prove compliance.
State-Specific Considerations
Illinois
One of the strictest states. The Illinois Real Estate License Act limits how many assignments you can do without a license. More than one per year may require a license.
Oklahoma, Texas, Ohio, North Carolina
Have cracked down on wholesaling, requiring additional disclosures.
Texas requires a written disclosure that you do not own the property but have an equitable interest.
Oklahoma requires clarity on whether you’re selling a property or a contract.
California and New York
Aggressive regulators, especially in urban markets. Disclosures and clean wording are critical.
Other States
Some require specific wording in contracts or disclosures to sellers/buyers.
Always check your state’s real estate commission website for the latest updates.
Marketing Channels: What’s Safe vs. Risky
Safe Channels:
Email blasts to your private buyer list.
One-on-one conversations with vetted buyers.
Investor networking events.
Phone calls or text messages with known buyers.
Risky Channels:
Posting contracts on MLS without a license.
Facebook Marketplace, Craigslist, or Zillow ads phrased as property sales.
Flyers/signs that don’t clarify it’s a contract assignment.
Paid ads that make it look like you’re brokering real estate.
Scripts and Disclaimers
Email Blast Disclaimer Example:
“This offering is for the assignment of a purchase agreement. We are not real estate agents. The buyer will receive our equitable interest in the contract. Property is sold as-is. Buyer to perform their own due diligence.”
Conversation Starter With Buyers:
“I’ve got a contract available on [Address]. Looking for an assignee who can close quickly. Would you like me to send over details?”
Seller Disclosure Script:
“I want to be upfront, I work with other investors and may assign this contract. That means I could bring in a partner or buyer to close. You’ll still receive exactly what we agree on at closing.”
Compliance Tips for Long-Term Safety
Consult a Local Attorney: Have an attorney review your assignment contracts and disclaimers.
Don’t Over-Market: Stick to your buyer list. Public ads raise red flags.
Keep Your Language Precise: Say “assigning a contract,” not “selling a house.”
Stay Updated: Laws shift, what’s legal this year may tighten next year.
Educate Buyers and Sellers: Transparency avoids misunderstandings.
Case Study Examples
Case 1: Ohio Compliance
Investor “M” marketed a contract on a vacant property in Ohio. Instead of posting “House for Sale” online, he emailed his private buyers: “Assignment of Contract on [Street Address] Available.” He included contract terms, an assignment fee, and a disclosure. Deal closed smoothly.
Case 2: Non-Compliance in Texas
Another wholesaler in Texas posted “House for Sale” on Facebook Marketplace without disclosure. The state real estate commission opened an investigation. They were fined and barred from further activity until obtaining a license.
Lesson: wording and channels make all the difference.
Myth vs. Reality: Off-Market Marketing
Myth | Reality | Fix |
You can market any property | You must have a contract or ownership | Get a signed agreement first |
You’re selling the house | You’re selling your contract rights | Phrase correctly |
MLS and public ads are fine | Most states see that as brokerage | Stick to private lists |
Sellers don’t need to know | Transparency prevents disputes | Always disclose |
Disclaimers are optional | They are your legal protection | Always include them |
Checklist: Legal Marketing of Off-Market Deals
Have the property under contract.
Confirm your state’s specific rules.
Phrase ads as “assignment of contract.”
Use disclaimers in emails/texts.
Send to private buyer list only.
Never post on MLS unless licensed.
Stay transparent with both seller and buyer.
Consult attorney for state-specific compliance.
Keep digital and paper records of ads/disclaimers.
Conclusion: Protect Your Business, Play the Long Game
Marketing off-market properties legally comes down to clarity, compliance, and transparency.
Always check your state’s regulations, avoid public misrepresentation, and focus on marketing your contract, not the property itself. Investors who ignore these rules may close a few deals fast, but they put their reputation and business at risk.
The professionals who play by the rules build sustainable, long-term pipelines of deals.
By focusing on compliance today, you ensure your business survives tomorrow. The goal isn’t just to close one deal, it’s to build a reputation and brand that generates consistent off-market opportunities for years to come.
