Wholesale Real Estate Contract Template (Free Download & Guide)
A solid purchase and sale agreement is the backbone of every wholesale transaction. It's the legal document that gives you equitable interest in a property — without it, you have nothing to assign to a buyer. Getting the contract right protects you legally, gives you flexibility to exit if needed, and makes the wholesale process smooth for everyone involved.
This guide breaks down every essential clause in a wholesale contract, explains why each matters, and highlights the mistakes that trip up beginners.
The Two Documents in Every Wholesale Transaction
A wholesale deal involves two separate contracts:
- Purchase and Sale Agreement (PSA): The contract between you (the wholesaler) and the seller. This is what you sign when you "lock up" the property.
- Assignment of Contract: The contract between you and your end buyer. This transfers your rights under the PSA to the buyer in exchange for your wholesale fee.
Some wholesalers use a state-specific purchase contract (like the TREC 1-4 contract in Texas) with an assignment addendum. Others use a custom purchase agreement written by their attorney. Either approach works — the key is having the right clauses in place.
Essential Clauses in a Wholesale Purchase Agreement
1. The Assignment Clause
This is the most important clause in a wholesale contract. Without it, you may not have the legal right to assign the contract to your end buyer.
Sample language: "Buyer and/or assigns shall have the right to assign this contract to a third party without the written consent of the Seller."
Some wholesalers simply add "and/or assigns" after the buyer's name on the contract. For example: "John Smith and/or assigns" as the buyer. This is the simplest approach, but explicit assignment language in the body of the contract is stronger legal protection.
Important notes:
- Many state-specific standard contracts (like the TREC 1-4 in Texas) do not include an assignment clause by default. You must add it as an addendum.
- Some sellers or their agents may resist the assignment clause. If this happens, consider doing a double close instead.
- FHA, VA, and some conventional loan programs restrict assignment. This only matters if your end buyer is using conventional financing — rare in wholesale transactions since most buyers are cash or hard money.
2. Inspection/Due Diligence Period
The inspection period (also called the feasibility period or due diligence period, depending on your state) is your exit strategy. If you can't find a buyer or discover issues with the property, you can cancel the contract during this period and get your earnest money back.
Recommended: 14-21 days inspection period for wholesale deals. This gives you enough time to market the property to your buyer list.
In Texas, the equivalent is the "Option Period" — a negotiated number of days during which the buyer can terminate for any reason, in exchange for a small, non-refundable option fee ($100-$500 typically). The option fee is separate from and in addition to earnest money.
During the inspection period:
- Market the property aggressively to your buyer list
- Get repair estimates from contractors
- Verify your ARV with fresh comps
- Check for title issues, liens, or code violations
3. Earnest Money Deposit (EMD)
Earnest money shows the seller you're serious. It's deposited with the title company or escrow agent and applied toward the purchase price at closing.
Typical EMD amounts for wholesale deals:
- Standard: $500-$2,000
- Higher-value properties: $2,000-$5,000
- Competitive situations: $5,000+ (to stand out from other offers)
Your EMD is generally refundable during the inspection/option period. After that period expires, the EMD may become non-refundable — meaning if you back out of the deal for any reason other than a specific contractual contingency, you could lose it.
Keep your EMD reasonable. Putting up $10,000 in earnest money on a wholesale deal creates unnecessary exposure.
4. Purchase Price
The purchase price should be based on your Maximum Allowable Offer (MAO) calculation:
MAO = ARV × 70% − Repairs − Your Wholesale Fee
Leave enough room between your purchase price and the end buyer's expected price to accommodate your fee. If you negotiate too high a price with the seller, you won't have enough spread for a meaningful wholesale fee, and the deal becomes unmarketable.
5. Closing Date
Set the closing date 21-30 days from the contract date. This gives you time to find a buyer, complete due diligence, and allow the title company to do their work.
Include language allowing you to extend the closing date if needed: "Buyer shall have the right to extend the closing date by up to 14 days with written notice to Seller." Extensions give you breathing room if your buyer needs additional time.
6. As-Is Clause
Every wholesale contract should specify that the property is being purchased "as-is" — meaning the seller is not required to make any repairs or improvements.
Sample language: "Property is being sold in its present, as-is condition. Seller shall not be required to make any repairs or improvements."
This protects you from any argument that you agreed to do work on the property, and sets the right expectation with the seller.
7. Seller Disclosures
Most states require sellers to disclose known material defects. Even if your state doesn't mandate disclosures, ask for them. You want to know about foundation issues, flooding history, termite damage, mold, unpermitted work, or anything else that could affect the property's value.
This information is also valuable for your end buyer. A thorough disclosure package makes your deal more attractive because it reduces the buyer's risk of unpleasant surprises.
8. Title and Title Company
Your contract should specify that the seller will provide clear, marketable title — no liens, encumbrances, or claims that would prevent a clean sale. The title company performs a title search to verify this.
Choose a title company experienced with wholesale and assignment transactions. Not all title companies handle assignments — ask upfront.
The Assignment of Contract
Once you have a buyer, you'll execute a separate Assignment of Contract document that:
- References the original purchase agreement (by date and property address)
- Names the assignor (you) and the assignee (your buyer)
- States the assignment fee
- Specifies payment terms (typically at closing from the buyer's funds)
- Transfers all rights and obligations under the original contract to the buyer
The buyer typically pays a non-refundable deposit at the time of assignment, with the balance due at closing.
When to Use a Double Close Instead
Sometimes an assignment isn't practical. Common reasons to double close:
- Large assignment fee: If your fee is $20,000+ and you want to keep it private, a double close hides your spread.
- Seller refuses assignment: Some sellers or their agents won't agree. With a double close, you actually purchase the property and immediately resell.
- REO/bank-owned properties: Banks typically don't allow assignment.
- Buyer using conventional financing: Some lenders have seasoning requirements.
In a double close, you close with the seller (A-B transaction) and close with the buyer (B-C transaction) on the same day. You briefly take title. Some title companies will fund the A-B closing with the B-C proceeds so you don't need your own capital.
Common Contract Mistakes to Avoid
- Forgetting the assignment clause. Without it, you may not be able to assign. Always include it.
- Setting the inspection period too short. Seven days is usually not enough to market and find a buyer. Use 14-21 days.
- Putting up too much earnest money. Keep your risk proportional. $500-$2,000 is standard.
- Using a boilerplate contract from the internet. Every state has different contract laws. Use a state-specific form reviewed by a local attorney.
- Skipping the title search. Liens, unpaid taxes, and title defects kill deals. Always close through a title company.
- Not disclosing your role. Many states require you to disclose wholesale intent. Be transparent.
- No extension clause. If your buyer needs an extra week, you need the contractual right to extend.
- Failing to include the property legal description. The street address alone may not be sufficient. Include the legal description from the county records.
State-Specific Considerations
| State | Standard Contract | Notable Features |
|---|---|---|
| Texas | TREC 1-4 Family Residential | Option Period (non-refundable fee) instead of inspection contingency. Must add assignment addendum. |
| Florida | FAR/BAR Contract | Inspection period is standard. Assignment allowed unless restricted. |
| California | CAR RPA | 17-day default contingency. Assignment requires written consent per default terms. |
| Ohio | OAR Purchase Contract | Inspection contingency standard. Recent legislation may require wholesale disclosure. |
| Illinois | MR Multi-Board | Attorney review period (5 business days). May require license for wholesale activities. |
| Georgia | GAR Purchase Agreement | Due diligence period standard. Assignment generally allowed. |
| North Carolina | NC Offer to Purchase | Due diligence period with non-refundable fee. Similar structure to TX option period. |
Always have a local real estate attorney review your contract before you start using it. The $300-$500 you spend on legal review is the best investment you'll make in your wholesaling business.
Free Contract Resources
While we strongly recommend working with an attorney to customize a contract for your state, here are resources to get started:
- Your state's real estate commission: Most publish standard residential purchase contracts for free.
- Local REIA: Many REIAs provide member access to contract templates used by local investors.
- BiggerPockets file place: Free downloadable contract templates from experienced investors.
- Your title company: Investor-friendly title companies often share assignment of contract templates.