Real Estate Wholesaling Contract PDF
If you intend on wholesaling houses, you will need an assignable wholesaling contract. This type of purchase agreement will give you the option to assign your rights and interests to another buyer. There are many wholesaling contracts out there, but I have found this version to be the best. Typically, my seller’s accept this assignable contract “as is” and do not ask for any changes.
Remember, every state has different laws relating to the purchase and sale of real estate. I strongly suggest you consult with a real estate attorney before using this agreement. Most of the language will be acceptable in any state but it’s always wise to cover bases first.
Contract Terms for Wholesaling Houses
It’s important to understand why we use a different purchase agreement for wholesaling houses. In a wholesale deal, you put a property under contract directly with the seller. Then you assign your rights and interests in that property to a new buyer for a fee. The difference between the original purchase price and what you assigned it for is your assignment fee. It’s common to make $10,000 or more as an assignment fee wholesaling real estate.
Because of the nature of a wholesale deal, you need to have an assignable purchase agreement to make it work. Here are the important disclosures and clauses you need to have in your wholesaling contract:
Assignment and Release Clause
ASSIGNMENT AND RELEASE. Seller agrees and acknowledges that Buyer may assign its rights under this Agreement to a wholly or partially owned entity of the Buyer or a third party that will close directly with Seller. Buyer shall give notice in writing to Seller of such assignment, and Seller agrees to release Buyer from any liability or duties under this Agreement.
This is one of the most important clauses you want in your real estate wholesaling contract. With this contract, you have the option to assign your rights and interests in the property to a new end buyer.
Marketing Clause for Wholesaling Contract
MARKETING. Seller authorizes Buyer to advertise the Property for sale (as a principal to this contract, not the Seller’s broker, agent or representative).
I like to keep my marketing clause short and sweet. The marketing clause is another important piece you need in your wholesaling contract. This gives you permission to market the property to your cash buyers.
No Agency Disclosure
AGENCY. SELLER ACKNOWLEDGES THAT SELLER HAS NOT BEEN REPRESENTED BY BUYER (Your Name), OR BY ANY REPRESENTATIVE OF BUYER WITH RESPECT TO THE PURCHASE AND SALE OF THE PROPERTY AS CONTEMPLATED BY THIS CONTRACT. SELLER AGREES AND UNDERSTANDS THAT THE BUYER AND BUYER’S REPRESENTATIVES ARE NOT ACTING AS SELLER’S BROKER OR AGENT IN THIS TRANSACTION AND HAVE BEEN ACTING SOLELY FOR BUYER’S OWN BENEFIT AS A PRINCIPAL TO THIS CONTRACT. SELLER AGREES AND UNDERSTANDS THAT BUYER HAS A FINANCIAL INTEREST IN THE TRANSACTION OTHER THAN THE RECEIPT OF COMPENSATION FOR REAL ESTATE SERVICES. SELLER ACKNOWLEDGES THAT IF SELLER LISTS THE PROPERTY FOR SALE WITH BUYER OR ANOTHER AS BROKER OR AGENT TO SELL THE PROPERTY, THE SELLER MAY RECEIVE MORE CONSIDERATION THAT BUYER HAS AGREED TO PAY, AND SELLER IS WILLINGLY SELLING IT TO BUYER WITH FULL KNOWLEDGE OF SUCH. SELLER AGREES TO HOLD BUYER FREE FROM ANY AND ALL LIABILITY REGARDING THIS PROPERTY AND TRANSACTION ARISING FROM ANY CLAIM OF AGENCY. SELLER ACKNOWLEDGES THAT BUYER IS NOT ACTING AS A LENDER IN THIS TRANSACTION.
This clause relieves you as being a seller’s agent. In a typical agency relationship, it would be your responsibility to look out for the seller’s best interest. Real estate agents have a fiduciary duty to their clients. This is common if you are a real estate agent listing a house for sale.
As wholesaler’s, we are opening escrow as buyer’s, not listing agents. We are not acting as agents in a wholesaling transaction. In most states, you do not need a real estate license to wholesale houses.
Inspection Period in a Wholesaling Contract
INSPECTION PERIOD. Buyer’s obligations to close this transaction are subject to the satisfaction of the following conditions on or before 24 hours before Closing: Buyer is satisfied with the status of title to the Property as disclosed by the title commitment provided to Buyer; and Physical Inspection/walk through of property within 10 days of executing this agreement with potential partners & assignees.
The inspection period is probably the most important clause you want in your wholesaling real estate contract. This gives you time to assign the contract to a buyer. The reality is, almost every real estate purchase agreement has an inspection period. This allows the buyer to do their due diligence and inspect the physical characteristics of the property prior to moving forward with the purchase. It also allows the buyer to ask for concessions or back out of the sale entirely if not satisfied with the results of the inspection.
Wholesaler’s use the inspection period to get their buyers into the property to conduct their own inspections. While some may argue calling it an inspection is misleading, the intention to inspect the property and close the transaction remains true. Most cash buyers do their own inspections and don’t need to hire a professional.
Wholesaling Houses Contract PDF
If you want a copy of the wholesaling houses contract PDF version, hit me up anytime. My email is info@crushingrei.com
Cheers!
Related: Inspection Period Explained – Be Transparent with Your Seller!
