The wholesale real estate contract, explained

Two contracts, not one

A wholesale real estate contract is a standard purchase-and-sale agreement between you and a seller that also gives you the right to assign the contract to someone else before closing. That one right is what lets a wholesaler get paid. You put a property under contract at an agreed price, then hand your position to an end buyer for a fee, without ever taking title or bringing $1 of your own to the closing table.

Almost every wholesale deal runs on two separate documents, and confusing them is the most common beginner mistake.

• The purchase agreement, signed between you and the seller. This is what creates the equitable interest you are about to sell.
• The assignment agreement, signed between you and your end buyer. This transfers your rights under the purchase agreement and states your assignment fee.

Two halves of one deal, in that order: your position is created in the purchase agreement and cashed in the assignment. If you are still learning the overall process, read how to wholesale real estate first, then come back here for the paperwork.

The clauses that matter, one by one

A wholesale purchase agreement is an ordinary residential contract with a few investor additions, and these are the clauses that decide whether a deal is safe to work.

• Parties and legal description. The full legal names of every owner on title, plus the property’s legal description, not just the street address. Copy both off the recorded deed at the county recorder rather than off Zillow or the tax bill. A missing owner, whether a spouse, an heir or an LLC member, can sink the closing.
• Purchase price and payment terms. The price you and the seller agreed to, and how it gets paid at closing. If you are promising an all-cash close with no financing contingency, put that on the page. It is most of what the seller is giving up 20% or 30% of their price for.
• Earnest money deposit. Your good-faith deposit, usually small in wholesale deals: commonly $500 to $2,000, sometimes as little as $10.
• Inspection or due-diligence period. A window, often around 10 days, in which you can inspect and cancel for any reason. This is your main exit if you cannot find a buyer in 10 days, so never leave it out.
• Title and closing. The deed type, usually a warranty deed, plus a title-insurance contingency and a closing date. Name the closing agent in the contract, and name one that has handled an assignment before. Most wholesale contracts close in 30 days or less.
• Contingencies. Inspection, title and sometimes financing contingencies are your legal outs, letting you cancel cleanly instead of forfeiting the deposit.
• The assignment clause. The line that makes the whole thing work: “Buyer reserves the right to assign this contract,” or “and/or assigns” after your name. Without it there is legally nothing to hand an end buyer.
• Default and risk of loss. What happens if either side breaks the contract, and who carries the risk if a pipe bursts in February before closing.
• Disclosures. Federal law fixes a set of them on any home built before 1978: hand over the EPA pamphlet Protect Your Family From Lead in Your Home, disclose known lead paint and any reports you hold, attach a signed Lead Warning Statement, give the buyer 10 days to test, and keep the signed disclosure for 3 years (EPA). State forms sit on top of that.

The assignment clause has statutory backing in some states and a statutory trap in others. Texas spells it out. You may sell an option or assign a contract to purchase real property without holding a license only if you do not use that contract to engage in real estate brokerage and you disclose the nature of your equitable interest in writing to any seller or potential buyer; leave the disclosure out and the same section says you are brokering (Texas Occupations Code Sec. 1101.0045). That language dates to 2017 and was amended in 2024.

Earnest money deserves a second read every time, because it is a balancing act. At $10 the seller feels free to keep shopping, and any agent advising them will say so. At $5,000 you have real cash exposed if your buyer walks on day 9, so most wholesalers keep the deposit modest and lean on a solid inspection period instead.

That inspection window is the safety valve. Inside it you can cancel and get the deposit back for any reason, which is what lets you tie up a house while you confirm the numbers and find a buyer. Outside it you are exposed. Count the working days too: a 10-day period signed on a Thursday leaves you roughly 6 business days to walk the property, get a contractor through it and get a number from a buyer.

Assignment vs. double closing

Once the property is under contract you have two ways to cash out. An assignment transfers your rights under the purchase agreement to the end buyer for a fee, on 1 page. The original seller keeps title until your buyer closes directly with them, and you never appear in the chain of title at all.

A double closing is two back-to-back transactions on the same day. You buy from the seller (A to B), then immediately resell to your end buyer (B to C), usually with short-term transactional funding. It costs more. You pay two sets of closing costs plus the funding fee, which on a $120,000 purchase is real money coming out of a fee you have not collected yet. It is mainly used where assignment is restricted, or where you want the spread kept off the seller’s Closing Disclosure.

For most deals a clean assignment is simpler and cheaper. The fee is frequently split so the buyer has something at stake: $3,000 due when the assignment is signed, for instance, and the balance at closing.

How wholesalers get paid: the assignment fee

The assignment fee is your profit. Real Estate Bees surveyed more than 1,000 wholesalers and put the average U.S. fee at about $13,000, with Arizona near $5,000 at the low end, North Carolina and Georgia tied around $22,000, and St. Louis topping the city list at roughly $25,000 (Real Estate Bees). Read that for what it is. It is self-reported by wholesalers who chose to answer a survey about their fees, which is not a random sample, and it skews toward people with a fee worth reporting. Your first one will not look like the average.

Your number depends on the spread between your contract price and what the property is worth to a cash buyer, which in the example below is $15,000. That is why the price you negotiate up front is the thing protecting the fee, not any clause you add afterward.

A deal from contract to check

Numbers make the paperwork concrete. Say you find a tired rental while driving for dollars and the owner is open to selling. Figures vary by market; this one is an illustration.

• After-repair value: $220,000, based on comparable sales.
• Estimated repairs: $40,000.
• Maximum allowable offer under the 70% rule: ($220,000 × 0.70) − $40,000 = $114,000.
• Your contract price with the seller: $108,000, with $500 earnest money and a 10-day inspection period.
• Assignment to a cash buyer: $123,000.
• Your assignment fee: $15,000, the spread between your contract and the buyer’s price.

You never funded the purchase or took title. Every dollar of that $15,000 was earned at the negotiating table, weeks before anyone signed an assignment. The lever was the $108,000, and getting to a number like that starts with reaching the owner before anyone else, which is a question of good property owner data and steady outreach rather than contract drafting.

How to fill out the contract, step by step

Once a seller says yes, completing the agreement is mechanical. Five steps.

1. Enter every owner’s full legal name exactly as it appears on title, plus the legal description from the county record. Pull both from the county assessor and recorder rather than trusting what the seller tells you. If the deed shows a trust you need the trustee, and if it shows an LLC you need whoever the operating agreement says can sign.
2. Write the agreed purchase price and the earnest money amount, and name who holds the deposit. Escrow at a title company or attorney’s office is the norm. Holding $2,000 of someone else’s money in your own account looks amateur and creates arguments later.
3. Set an inspection or due-diligence window long enough to line up a buyer; 7 to 14 days is common. If your buyers list is thin, ask for 21 and expect to trade something for it.
4. Add the assignment language, and where your state requires it, a written disclosure of your intent to assign.
5. Set a closing date your title company can actually hit: 30 days is normal, 14 is a favor, and you should not ask for that favor twice. Then sign, deliver the earnest money to escrow, and send the contract to your closer the same day so the title search starts immediately.

One habit that pays for itself: open title the day you sign. If there is a second lien, an unreleased mortgage or an heir nobody mentioned, you want to know inside your inspection window, not 3 days before closing.

Using a contract template the right way

A wholesale real estate contract template is a fine starting point. Treat it as a draft. Real estate contracts are governed state by state, and a clause that is standard in Texas may be unenforceable in New York.

Before you reuse a template, check 4 things: the assignment language is present and unqualified, the inspection period gives you a clean unilateral exit, the earnest money terms say plainly when the deposit stops being refundable, and any state-required disclosure is built into the form rather than stapled on. Then have a local real estate attorney review it once. Drafting or review typically runs $100 to just over $1,000, and you reuse that vetted version on every deal afterward. It is the cheapest insurance in the business.

The state disclosure rules every wholesaler should know

The biggest change to the wholesale contract in years is not a clause. It is disclosure. A wave of laws passed in 2025 now requires wholesalers to tell sellers, in writing, that they intend to assign the contract rather than buy the house themselves. Skipping that step can void your deal.

• Connecticut (Public Act 25-168): wholesalers register with the Department of Consumer Protection, sellers get a three-business-day window to cancel without penalty and without a reason, the original contract cannot set a closing more than 90 days out, and no lien may be placed on a property under a wholesale contract. Registration opens July 1, 2026 (Connecticut DCP).
• Maryland (HB 124 / SB 160): you must disclose your intent to assign or sell your equitable interest, and the owner can cancel without penalty if you do not. Effective October 1, 2025.
• Oklahoma (SB 1075): disclosure of intent to assign, a note advising the homeowner to seek legal counsel, a two-business-day cancellation right, and earnest money held at an Oklahoma FDIC-insured bank. A contract missing a required element is unenforceable and the homeowner keeps the deposit. Effective November 1, 2025 (Oklahoma Real Estate Commission).
• Tennessee (SB 909): wholesalers must disclose their intent to assign and describe the nature of their interest in the property. Effective March 25, 2025.
• North Dakota (HB 1125): existing wholesaling rules now apply to all real estate wholesale transactions, not just residential. Effective August 1, 2025. Maryland, Tennessee and North Dakota are summarized together in this Virginia Land Title Association review.
• Ohio (SB 155): a signed disclosure to the owner before the contract is executed, saying you act for your own benefit, that you may assign without the owner’s consent, and that the agreed price may be below market value. Miss it and the homeowner can cancel. Effective March 2, 2026, with Consumer Sales Practices Act enforcement behind it (Ohio Department of Commerce).

Even where no statute applies, disclosing your intent to assign is now standard practice. Some states count repetition on its own. Illinois defines a broker to include anyone engaged in a pattern of dealing in assignable contracts for the purchase or sale of real estate on 2 or more occasions in any 12-month period (225 ILCS 454/1-10), which puts the licensing line at your second deal of the year. This is general information, not legal advice. Check your own state, and check it again before you scale.

Eight contract mistakes that kill wholesale deals

• Leaving out the assignment clause, so there is legally nothing to transfer.
• An inspection period too short to line up an end buyer. Five days is not enough unless the buyer is already standing next to you.
• Earnest money so low the seller feels free to take a better offer. A $10 deposit on a $200,000 house reads as exactly what it is.
• Marketing the property publicly instead of marketing your contract to buyers. A fast way to anger sellers and, in some states, to break the law. South Carolina’s Real Estate Commission went further and called the distinction close to unworkable, saying that advertising a contract position without implying, suggesting or purporting to market the underlying property is “practically impossible” (SC REC guidance).
• Not disclosing your intent to assign in Ohio, Oklahoma, Maryland, Tennessee or Connecticut, where it is now required.
• Promising the seller a 14-day cash close, then scrambling to find a buyer. Only commit to what you can deliver.
• Skipping a written assignment agreement with your buyer, so the fee and terms are never actually locked in.
• Forgetting to confirm that every person on title will sign. A missing spouse, an heir, or one of 4 siblings on an estate deed can void the deal at the closing table.

All 8 are cheap to fix and expensive to discover late. Run the list once before you send a contract out for signature.

Where your next contract comes from

A contract is only worth something when a motivated seller signs it, and that is the real bottleneck. The paperwork above takes an afternoon. Finding the owner who wants to talk takes the rest of the year.

Two ways to fix that. Build the list yourself, starting with how to find motivated sellers, then work it with automated direct mail. Or let Farmrix do the sourcing: it scores every owner in your market on how likely they are to sell in the next 6 to 12 months, ranks them, and prints and mails postcards to the top of that list. Because the mailing address is already on the public record, you skip the skip tracing and cold-calling most wholesalers grind through.

Whichever route you take, do this today: get your contract template in front of a local attorney, add the disclosure language your state requires, and save a clean copy you can fill out in 10 minutes. Then go find someone to sign it. Compare packages on the pricing page or book a call to map it to your market.