March 17, 2022
Philadelphia homeowners now can add their names to a registry that prohibits unsolicited offers on their homes – a tactic commonly used by real estate speculators looking to purchase houses at below-market prices.
The city's "do not solicit" registry, run by the Commission of Human Relations, is the result of a law enacted in December 2020 to protect homeowners from wholesalers using predatory tactics.
Wholesalers enter contracts with sellers with the intention of selling that contract to an investor at a higher price, keeping the difference as profit. There often are minimal changes made to the properties, effectively leaving homeowners with less money than their houses are worth.
Councilmember Allan Domb, who sponsored the legislation that created the registry, told KYW that he has heard stories of people agreeing to sell their homes for as little as $30,000 and then seeing them back listed on the market months later for $90,000 to $100,000 with little renovations.
Wholesalers often target aging properties in gentrifying neighborhoods, aggressively contacting homeowners through phone calls, letters and visits. They have been known to target vulnerable people, including seniors, heirs grieving the death of a family member and immigrants who don't speak English.
Homeowners who add their names to the registry will no longer receive unsolicited offers from wholesalers seeking to purchase or rent their properties. Wholesalers also are prohibited from sending mailers about homes that were just listed or sold in the neighborhood.
Joining the registry does not prevent homeowners from soliciting sale estimates or selling their homes.
By enticing homeowners with "cash for home" incentives, wholesalers traditionally could make offers on houses without providing homeowners with accurate information on the market value of their homes.
The law that created the registry also changed that. Wholesalers now must provide homeowners a document that explains how to access resources detailing the fair market values of their homes. They are required to provide homeowners with 72 hours of notice prior to making an offer or request on properties.They also must gain a permit and license from the city before soliciting any homeowner. The permit must be renewed annually by the city. In order to be approved, wholesalers are required to pass a background check.
"Communities where homeowners are facing displacement from the rippling effects of redlining, deferred maintenance on an aging housing stock, and gentrification already need relief," Tonnetta Graham, president of the Strawberry Mansion CDC, said in October 2020. "With the onslaught of solicitations from the 'We Buy Houses' entities, the need has grown for more pressing."