By Gren · September 17, 2026
Texas is one of the friendlier states for wholesaling, and it has been for longer than most people writing about it seem to realize. You do not need a real estate license to assign a contract you signed yourself. What you do need is two pieces of paper — one for the seller, one for the buyer taking the assignment.
Here is what the law actually says, where the usual write-ups get it wrong, and what a clean Texas file looks like.
The rule in one paragraph
Before you agree to assign your interest in a purchase contract, you have to disclose in writing to the seller that you intend to assign, and in writing to your end buyer that you are selling an interest in a contract and do not hold title to the property. That is it. Two disclosures, both in writing, both before the assignment is signed.
The part nearly everyone gets wrong
Search around and you will be told this is a new rule, brought in by SB 1577, effective 1 January 2024.
It is not new. The disclosure requirement has been on the books since 1 September 2017, when SB 2212 added it as Property Code §5.086. What SB 1577 did in 2023 was move the same rule to a new address: Property Code §5.0205. Same obligation, new section number.
That matters for two reasons. If you were wholesaling in Texas between 2017 and 2024 and skipped the disclosures because you thought the rule started in 2024, you were already out of compliance. And if a buyer, a title company or a lawyer quotes you §5.086, they are reading an old copy.
What happens if you skip it
This is the second place the internet gets Texas wrong. You will see claims about deceptive trade practices and treble damages under the DTPA, and claims that there are no criminal penalties at all. Neither belongs in a summary of this statute.
Here is the actual chain. Occupations Code §1101.0045(a) lets an unlicensed person sell or assign an equitable interest, on two conditions: they do not use the contract to engage in real estate brokerage, and they disclose the nature of that equitable interest in writing to any seller or potential buyer. Then §1101.0045(b) closes the loop — failing to make that written disclosure is real estate brokerage.
So the disclosure is not paperwork hygiene. It is the thing that keeps you on the right side of the license line. Skip it and you are not an investor who forgot a form; you are an unlicensed broker, with all of Chapter 1101 and the Texas Real Estate Commission's enforcement to look forward to.
What a clean Texas file looks like
On the seller side, you want an express statement that the buyer may assign the contract. Any of these work: an assignment clause in the contract, a separate signed disclosure, or "and/or assigns" in the buyer line together with language making the intent to assign clear.
A word on "and/or assigns" on its own. It is the most common thing we see, and it is the weakest. It tells a lawyer you contemplated an assignment. It does not clearly tell a seller you intend to sell your position for a fee. Put the sentence in.
Model clause (seller): Buyer discloses to Seller that Buyer is acquiring an equitable interest in the Property under this Agreement and does not hold legal title. Buyer may assign this Agreement, and Buyer's interest in the Property is limited to Buyer's contractual rights under this Agreement.
On the buyer side, your assignment agreement needs a signed statement that you are assigning a contract interest and do not hold legal title.
Model clause (assignee): Assignor discloses to Assignee that Assignor is selling and assigning Assignor's equitable interest in the Purchase Agreement described above, and is not selling the Property itself. Assignor does not hold legal title to the Property.
Neither of these is a prescribed form. Texas tells you what has to be communicated, not what font to use. That is a freedom other states no longer give you — Ohio now dictates the wording and the point size, and Oklahoma tells you where on the page the notice sits.
Timing, and the things Texas does not require
Both disclosures go out before the assignment agreement is signed. Best practice on the seller side is to put it in the purchase contract itself, so it predates any marketing you do.
What Texas does not give you:
- No cooling-off period. §5.0205 creates no statutory right for the seller to cancel. If someone tells you a Texas seller has three days to walk, ask them for the section number.
- No wholesaler registration. Nothing to file, nothing to renew. Connecticut and Oregon now require registration; Texas does not.
- No deal limit. No "two deals a year and then you need a license" rule of the sort Virginia and Illinois have.
Marketing: the line you can actually cross
The disclosure rules are easy. The license line is where Texas wholesalers get into trouble, and it is entirely about how you market.
You may market your contract position. You may not market the property as though you own it. Saying "my house, for sale" when you hold an equitable interest is exactly the behaviour the license law is aimed at. Say "assignment of contract" and "contract rights", and let your buyers know precisely what they are being offered.
Two more:
- No signed contract means nothing to market. Advertising a property you have no contract on is brokerage, plainly.
- If a licensed agent is involved, they carry TREC's advertising rules with them — and a licensee may not draft assignment provisions for a client. That is lawyer work.
The double close
If you take title at a first closing and then resell, §5.0205 does not apply to the resale — you are selling property you own. Just make sure the first deed actually recorded and funded before you treat the deal that way. "We were going to double close" is not a double close.
The short version
Two written disclosures, both before the assignment, no prescribed form, no cancellation window, no license for assigning your own contract. Market the contract, never the house. Been the law since 2017, whatever the blogs say.
If your numbers work, Texas is about as workable as it gets. If your numbers do not work, no disclosure will save you — run them first with the free MAO calculator, then paper it properly.
Cut the noise. Catch the signal.
— Gren
This is general information about Texas law as of September 2026, not legal advice. Statutes change and facts differ. Before you rely on any of it for a specific deal, talk to a Texas real estate attorney. Citations: Tex. Prop. Code §5.0205; Tex. Occ. Code §1101.0045.