Michigan Wholesaling Laws: Article 25 Licensing and Pending HB 5366

Wholesaling is legal in Michigan today, and Michigan has not enacted a wholesaling-specific statute. That could change. House Bill 5366, introduced in December 2025, would make real estate wholesaling a licensed broker activity and require a written disclosure to the seller before an assignment. Until something passes, Michigan wholesalers are governed by Article 25 of the Occupational Code, the licensing law for real estate brokers, plus the Michigan Consumer Protection Act.

This guide covers the current rules, what HB 5366 would change, and a checklist for Michigan deals. For the national picture, see our state-by-state wholesaling legal guide.

The Current Licensing Framework: MCL 339.2501

Who is a broker. MCL 339.2501 defines a real estate broker as a person who, "with intent to collect or receive a fee, compensation, or valuable consideration, sells or offers for sale, buys or offers to buy… or negotiates the purchase, sale, or exchange of real estate." The definition also covers a person "that, as owner or otherwise, engages in the sale of real estate as a principal vocation."

The owner exemption. MCL 339.2503 exempts "an owner or lessor… that performs an act as a real estate broker… with reference to property owned by it, unless performed as a principal vocation not through a licensed real estate broker." Two points for wholesalers: the exemption speaks of property "owned by it," and it does not apply when the activity is your principal vocation.

Penalties. Under MCL 339.601, a person may not practice a regulated occupation without a license. A first offense is "a misdemeanor, punishable by a fine of not more than $500.00, or imprisonment for not more than 90 days, or both." A later offense carries up to $1,000 and/or one year. Courts can order restitution, and any affected person can sue for an injunction and recover "actual costs and attorney fees."

Collecting your fee. MCL 339.2512a says a person "shall not maintain an action in a court of this state for the collection of compensation… without alleging and proving that the person was licensed." If a fee is characterized as broker compensation, you may not be able to sue for it.

The regulator is the Michigan Department of Licensing and Regulatory Affairs (LARA), Bureau of Professional Licensing, with the Michigan Board of Real Estate Brokers and Salespersons. We found no LARA guidance specifically addressing wholesaling.

What HB 5366 Would Change

HB 5366 of 2025 was introduced on December 16, 2025 and referred to the House Committee on Government Operations. As of October 6, 2026, it has had no committee action. It is not law. As introduced, it would:

• Define wholesaling. "Real estate wholesaling" would mean "advertising, marketing, offering, or negotiating an assignment or other transfer of a buyer's legal interest or equitable interest in residential real property."
• Make it broker activity. The broker definition would add: "Real estate broker includes a person that engages in real estate wholesaling."
• Narrow the owner exemption. The exemption would not apply to a person that, as owner, engages in "advertising, marketing, offering, or assigning an equitable interest in residential real property to the public."
• Require a seller disclosure before assignment, stating "That the buyer is an assignor and does not intend to occupy the property," "The expected resale price or assignment fee" (or a maximum percentage or dollar amount if not yet known), and "That the seller has a 5-business-day cancellation right."

Read the bill text at legislature.mi.gov. Bills can change substantially before passage, if they pass at all.

Assignment vs Double Close in Michigan

Assignment of contract: You transfer your rights as buyer to an end buyer, who closes with the seller. You never hold title. Today's owner exemption refers to property "owned by it," so assignments are where the licensing question sits, and they are exactly what HB 5366 targets.

Double close: You buy at the first closing and resell at a second, holding title when you resell. Michigan's state real estate transfer tax applies to recorded "Deeds or instruments of conveyance of property or any interest in property, for consideration" (MCL 207.523), at "$3.75 for each $500.00 or fraction of $500.00" (MCL 207.525). A double close records two deeds, so ask your title company how the tax will apply to each.

The Michigan Consumer Protection Act

The Michigan Consumer Protection Act applies to the sale of "property, tangible or intangible, real, personal, or mixed" (MCL 445.902). MCL 445.903 prohibits, among other things, "Failing to reveal a material fact, the omission of which tends to mislead or deceive the consumer" and "Failing to reveal facts that are material to the transaction in light of representations of fact made in a positive manner." Telling a seller you are "buying the house" while planning to assign the contract is the kind of omission that creates risk. Disclose your plan.

Marketing Rules

Michigan has no wholesaler advertising statute today. The risk under current law is the broker definition: offering to sell real estate for a fee. HB 5366 would make "advertising, marketing, offering, or negotiating" an assignment broker activity in its own right. Market accurately, describe what you hold as a contract position, and do not present yourself as the owner.

Michigan Compliance Checklist

1. Have a fully signed purchase contract with an assignment clause before you market.
2. Tell the seller in writing that you may assign the contract and earn a fee. HB 5366 would require this, and the Consumer Protection Act already penalizes misleading omissions.
3. Describe your position accurately in all marketing: a contract for assignment, not a property you own.
4. If wholesaling is your main business, ask a Michigan real estate attorney whether the "principal vocation" language in MCL 339.2501 and 339.2503 affects you.
5. Confirm with your title company how it will handle an assignment, and how transfer tax applies if you double close.
6. Watch HB 5366. If it moves out of committee, its license and disclosure rules could apply to your business.
7. Keep contracts, disclosures, and copies of all marketing in the deal file.

Frequently Asked Questions

Is wholesaling legal in Michigan?

Yes. Michigan has no law that prohibits wholesaling and no wholesaling-specific statute as of October 2026. Article 25 of the Occupational Code, the broker licensing law, still applies to how you market and how often you do deals.

Do I need a real estate license to wholesale in Michigan?

Current law does not address wholesaling by name. The owner exemption refers to property "owned by it" and does not apply when the activity is a "principal vocation." We found no LARA guidance on wholesaling. If HB 5366 passes as introduced, wholesaling residential property would require a broker license. Talk to a Michigan attorney about your situation.

Has Michigan passed a wholesaling law?

Not yet. HB 5366 was introduced December 16, 2025 and referred to the Committee on Government Operations, where it has had no further action as of October 6, 2026.

What is the penalty for unlicensed brokerage in Michigan?

A first offense under MCL 339.601 is a misdemeanor with a fine of up to $500, up to 90 days in jail, or both. Later offenses carry up to $1,000 and/or one year.

Disclaimer

This guide is for informational purposes only and does not constitute legal advice. Statutes and bill status were checked against official Michigan sources on October 6, 2026. Laws change, and how any statute applies depends on your facts. Consult a licensed Michigan real estate attorney before relying on this information for a transaction. Deal Run provides tools and information to help wholesalers operate more effectively. We are not a law firm and do not provide legal services.