New to buying from wholesalers: which contract terms are standard and which are negot

New to buying from wholesalers: which contract terms are standard and which are negot

San Diego, CA · Member since 2026 · 14 posts · 2 votes

I'm new to buying from wholesalers and I'm trying to understand what's normal before I sign anything. I'd like to hear from people who have done these deals. Maybe most of this is standard and I'm reading too much into it.

A few terms I've come across:

  1. The deposit is non-refundable at signing and goes to the wholesaler directly rather than into escrow. It stays non-refundable if the deal doesn't close for reasons outside the buyer's control, such as title problems or the homeowner backing out, and the buyer's remedy there is a set penalty amount. If the buyer defaults, they lose the deposit and can owe more.

  2. There's often no inspection or financing contingency. If closing is delayed, a daily charge applies, and the wholesaler sets the closing date. The buyer isn't supposed to contact the seller directly, or the wholesaler can cancel and keep the deposit.

  3. On costs, the buyer typically pays all closing costs plus several fees such as acquisition and coordination fees. The wholesaler's own spread often isn't stated. The wholesaler usually picks the title company, and the contract can't be assigned to the buyer's own LLC. The indemnity runs one way, from the buyer to the wholesaler.

  4. Some also ask for a buyer agency agreement, with auto-renewal, a commission on deals they introduce, advance consent to dual agency, financial documents, and binding arbitration.

So I'm curious how you see these. Which are normal and which would you push back on? How have you gotten wholesalers to agree to changes, and what do you want in place before you send any money? And what am I missing?

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James JonesPro Member
Investor · Collierville, TN 38017 · Member since 2017 · 734 posts · 542 votes
1w

I buy from wholesalers and I never put earnest money down. Period. Here's how I see your four terms:

1. Non-refundable deposit paid directly to the wholesaler: not normal, push back hard. Deposits go to title or escrow, never to the wholesaler's pocket. If they won't do that, walk away.

2. No inspection or financing contingency: normal on wholesale deals. You're buying as-is. So do your walkthrough and run your numbers BEFORE you sign, not after. Daily late charges are common. Don't sign a timeline you can't hit.

3. Buyer pays all closing costs plus acquisition/coordination fees: negotiable. Everything on a wholesale contract is negotiable. I push back on junk fees every time.

4. Buyer agency agreement with auto-renewal: only sign if that person is actually bringing you deals. Never sign an auto-renewing agreement with someone you just met.

Read every line. The wholesalers worth working with put everything in escrow and don't need your deposit to stay in business.

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  • Real Estate Agent · TN · Member since 2022 · 6 posts · 3 votes
    1w
  • James JonesPro Member
    Investor · Collierville, TN 38017 · Member since 2017 · 734 posts · 542 votes
    1w

    I buy from wholesalers and I never put earnest money down. Period. Here's how I see your four terms:

    1. Non-refundable deposit paid directly to the wholesaler: not normal, push back hard. Deposits go to title or escrow, never to the wholesaler's pocket. If they won't do that, walk away.

    2. No inspection or financing contingency: normal on wholesale deals. You're buying as-is. So do your walkthrough and run your numbers BEFORE you sign, not after. Daily late charges are common. Don't sign a timeline you can't hit.

    3. Buyer pays all closing costs plus acquisition/coordination fees: negotiable. Everything on a wholesale contract is negotiable. I push back on junk fees every time.

    4. Buyer agency agreement with auto-renewal: only sign if that person is actually bringing you deals. Never sign an auto-renewing agreement with someone you just met.

    Read every line. The wholesalers worth working with put everything in escrow and don't need your deposit to stay in business.

  • Real Estate Agent · TN · Member since 2022 · 6 posts · 3 votes
    1d

    You're not reading too much into it, but some of this is more normal than it looks once you understand how the deal is built. Going by your numbers:

    1. A non-refundable deposit is common in wholesale, and there's a real reason for it. A lot of wholesalers have put their own earnest money down with the seller. If a buyer walks at the last minute, the wholesaler loses that money, and it happens more than people think. A non-refundable deposit shows you're serious and can perform. Where I'd push back: it should still go to the title company, not the wholesaler's pocket. And if the deal dies because of a title problem or the seller backing out, you should get it back. Those aren't on you. If you default, losing the deposit is fair. Owing more on top of that, I'd negotiate out.

    2. As-is with no financing contingency is standard. On the closing date, keep in mind the wholesaler already has a closing date set with the seller, which is why it usually can't move. Ask to see that date in their contract so you know the deadline is real and not padded. The daily delay charge should only apply if you're the one causing the delay. No contacting the seller is standard too.

    3. If it's an assignment, remember you're stepping into a contract that's already bound. You take it as written. That means you have every right to read it before you sign, because every term in it becomes yours. Some wholesalers will redact their purchase price, and honestly, I'm fine with that. I tell them I don't care what they're making. If I've agreed to my price and the numbers work, good for them, they earned their fee. What I do need to see is everything else: closing date, contingencies, who pays what, and any conditions the seller added. One question I always ask is whether the seller knows the contract may be assigned. A seller who's surprised at the closing table can blow up a deal that was fine on paper. On costs, ask for one all-in number, since stacked fees are where the margin hides. You should also be able to close in your own LLC, and the indemnity should go both ways.

    4. This is the one I'd push back on hardest. A wholesaler who isn't licensed shouldn't be asking for a buyer agency agreement, a commission or dual agency consent. Proof of funds is normal. Tax returns, auto-renewal and binding arbitration I'd cross out.

    Before I send money: walk the property, run my own comps, read the seller's contract, and have title opened somewhere I'm comfortable with.

    I've been underwriting deals for investors for almost 10 years, but I'm not an attorney. Have a real estate attorney in your state read it before you sign. A good wholesaler won't flinch at that.

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