As a lawyer, my favorite answer to give when I'm asked even a very simple question is, "Sometimes, yes; sometimes, no. It all depends." When it comes to whether or not Wholesaling is really legal, that answer applies perfectly. When you do it right in the State of Ohio and follow the requirements and rules set forth in Section 4735.01 of the Ohio Revised Code, wholesaling can be done in a legal, compliant manner.
Are most people wholesaling legally? Absolutely not. In fact, I've been privileged to work with two large national organizations to make sure they are compliant with Ohio law when it comes to what they teach their customers and students.
Why is it necessary to get it right? Because this is an era of growing regulation and increasing scrutiny. The complaints of homeowners who thought they had the house sold, only to find out that some joker put it under contract and couldn't do anything with it, are reaching the ears of regulators and causing problems for investors. Below is a conversation that I had with the Ohio Department of Commerce Division of Real Estate. Please watch and listen to it. You will find their views likely to apply to your state regulators as well.
Contract Red Flags
Ohio Dept of Commerce Div of Real Estate