The wholesale purchase contract is the single most important document in any wholesaling deal. It's what gives you the right to assign, what protects your earnest money, and what determines whether the title company can close your deal.
This guide walks through every key clause in a wholesale contract — what to include, what to avoid, and exactly what each line is doing legally.
Use a state-specific template
Every state has standard purchase contract forms. Start with a state-approved residential purchase agreement (usually available from your state realtor association or a licensed agent) and modify it for wholesaling purposes. Don't draft from scratch.
Have a local real estate attorney review your modified template once ($300–$500). Reuse forever.
Essential clauses for a wholesale contract
1. Parties (buyer and seller)
The buyer field should read: "[Your Name / Your LLC Name] and/or assigns". The "and/or assigns" language is what gives you the legal right to transfer your buyer position to another party.
Without this language, you may not be able to assign the contract. This is the single most common rookie mistake.
2. Property description
Include the full street address, county, and (ideally) the legal description from the county recorder. Ambiguous descriptions can invalidate contracts.
3. Purchase price
The total you're agreeing to pay the seller. This is notyour MAO minus your fee — it's whatever you negotiated with the seller. Your fee sits on top when you assign.
4. Earnest money deposit
Typical: $100–$1,000, held in escrow by the title company or attorney. Always specify:
- Amount
- Who holds it (title company name)
- When it's due (typically 3 business days after contract signing)
- Refund conditions (inspection contingency, title issues, buyer's-choice under contingency, etc.)
5. Inspection contingency
Typically 7–14 days for you to conduct inspections and verify property condition. Should state:
- Length of inspection period
- Right to cancel with full earnest money refund during that period
- Access requirements (seller provides reasonable access)
This contingency is your exit hatch if the property isn't what you expected. Use it.
6. Closing date
Typical wholesale closing: 14–30 days from contract. Too short and you can't find a buyer; too long and the seller may back out. 30 days is the sweet spot for most deals.
Build in the right to extend by up to 14 days if needed — most sellers will agree to this during negotiation.
7. Closing costs
Specify who pays what. Typical wholesale:
- Seller pays: title search, owner's title policy, prorated taxes, seller-side closing fees
- Buyer pays: lender's title policy (if financed), deed recording, buyer-side closing fees
8. Closing location and agent
Specify the title company or closing attorney. Choose one experienced with investor transactions and assignments. Random generic title companies often flinch at seeing "and/or assigns" in the buyer field.
9. Assignment language (explicit)
In addition to "and/or assigns" in the buyer field, add an explicit clause:
"Buyer may assign this contract to another party without seller's consent. Upon such assignment, all rights and obligations of Buyer under this Agreement shall transfer to the Assignee, and the original Buyer shall be released from further obligation under this Agreement."
This removes any ambiguity about your right to assign and clarifies that post-assignment, you're out.
10. Disclosures
Federal and state disclosures include:
- Lead-based paint disclosure (federal; required for pre-1978 properties)
- State-specific seller disclosures (most states require property-condition disclosures)
- Wholesaler disclosure (required in some states like Pennsylvania)
11. Default clauses
What happens if either party breaches:
- Seller default: buyer can cancel and recover earnest money, or sue for specific performance
- Buyer default: seller retains earnest money as liquidated damages (most common)
12. Signatures and date
Both parties sign and date. Some states require notarization for certain transactions; most don't for simple purchase contracts. Your attorney will know.
Optional but valuable clauses
Financing contingency (usually no)
Wholesalers typically buy all-cash (even though they plan to assign). A financing contingency signals to seller you might not close. Skip it.
Appraisal contingency (usually no)
Same logic — implies financing. Skip it.
Right to re-inspect before closing
Useful. 3–5 day window before closing to re-verify condition hasn't changed. Most sellers will agree.
Marketing rights
Language granting you the right to market the property to potential assignees during the contract period. Protects you if seller claims you were illegally listing without a license.
Clauses to AVOID
- "Non-assignable" language — obvious, but sellers sometimes insert. Remove it.
- "Contingent on buyer obtaining financing" — already covered above
- "Buyer must close in their own name" — sellers sometimes add this after Googling "wholesaler"
- Overly broad seller default remedies — don't accept specific performance with penalties against you
Assignment of Contract document (separate)
When you find your buyer, you'll sign an Assignment of Contract separately. Key clauses:
- Reference to the original purchase contract (date, parties, property)
- Your fee amount
- Timing of fee payment (at closing from escrow)
- Assignee accepts all obligations and rights under original contract
- Both parties sign
The contract red flags that kill deals
- Seller listing the property on MLS while under contract (they think deal's fishy)
- Seller having their attorney review (usually fine, occasionally they insist on no-assignment language)
- Seller's family members interfering (especially with elderly sellers)
- Title company refusing to handle assignments (switch title companies)
Where to get a good template
- Your state's Realtor® association — standard residential purchase contracts
- Local REIA groups — member-reviewed investor contracts
- A real estate attorney in your state — $300–$500 for a custom template
- ReadyDeals — template library included on the free tier, auto-filled with lead data
Bottom line
The wholesale contract isn't complicated — but the "and/or assigns" language, the inspection contingency, and the explicit assignment clause are non-negotiable. Get a state-specific template, have an attorney review it once, and reuse.