Wholesale real estate glossary

The estimated market value of a property after all planned repairs and renovations are complete. ARV is the anchor number for every wholesale offer because the maximum you can pay is derived from it.

Example: A dated 3-bed sells for $110,000 as-is. Comparable renovated homes nearby sell for $200,000, so the ARV is about $200,000.

A short agreement that transfers a wholesaler’s rights and obligations under a purchase contract to an end buyer in exchange for an assignment fee. The wholesaler never takes title; the end buyer steps into the original contract and closes with the seller.

Example: You have a home under contract for $120,000 and assign that contract to a cash buyer for a $10,000 fee. The buyer closes with the seller at $120,000 and pays you $10,000.

The profit a wholesaler earns for assigning a purchase contract to an end buyer. It is the spread between the price the wholesaler agreed to pay the seller and the price the end buyer agrees to pay.

Example: Under contract at $120,000, assigned to a buyer at $130,000 — the assignment fee is $10,000.

A maintained database of cash buyers and investors ready to purchase wholesale deals, usually segmented by market, property type, and buy box. A strong buyer list is what turns a signed contract into a paid assignment.

Example: Before locking up a rental-grade duplex, you already know a dozen buy-and-hold investors on your list who want that exact property.

An investor who purchases property without mortgage financing, closing quickly and with few contingencies. Cash buyers are the typical end buyers on wholesale deals because they can perform on short timelines.

Example: A local flipper pays cash and closes in seven days, so there is no lender appraisal or loan approval to slow the assignment.

Fees and expenses beyond the purchase price required to complete a transaction — title insurance, escrow and recording fees, transfer taxes, and any attorney charges. Who pays which costs is negotiated in the purchase agreement.

Example: On a $120,000 purchase, title, recording, and transfer costs might add roughly $2,000–$4,000 that the settlement statement itemizes.

A recently sold property similar to the subject in location, size, age, and condition, used to estimate market value and ARV. The best comps are close by, sold recently, and truly similar.

Example: Three renovated 3-bed/2-bath homes within half a mile sold for $195,000–$205,000 in the last 90 days, supporting a $200,000 ARV.

The act of assigning a purchase contract to another party — the same process documented by an assignment contract. Most states permit it when the underlying agreement is assignable and the assignment is disclosed to the parties.

Example: You add an “and/or assigns” clause to your offer so the contract can later be assigned to your end buyer.

The process of evaluating a potential deal — pulling comps, estimating repairs, and calculating the maximum offer and expected spread — to decide whether and at what price to make an offer.

Example: ARV $200,000, repairs $30,000, target fee $10,000 → your analysis says offer no more than about $100,000.

The sell side of a wholesale deal: marketing a property under contract to buyers and getting the contract assigned or resold. Often owned by a dedicated disposition manager on a team.

Example: Once a home is under contract, disposition blasts it to the buyer list and fields offers within hours.

Two back-to-back closings — the wholesaler buys from the seller (A-to-B) and immediately resells to the end buyer (B-to-C), briefly taking title. Used when a wholesaler prefers not to disclose the assignment spread.

Example: You close on the home at $120,000 in the morning and resell to your buyer at $135,000 the same day, keeping the $15,000 difference.

The investigation a buyer performs before committing — inspecting the property, verifying title and liens, confirming repair estimates and comps. In wholesale contracts, a due-diligence (inspection) period is a common contingency that lets a buyer exit without penalty.

Example: A 10-day inspection period gives you time to walk the property and line up an end buyer before your deposit is at risk.

A good-faith deposit that shows the buyer is serious, held by escrow or the title company and applied to the purchase price at closing. On wholesale deals it is often small, and its refundability depends on the contract’s contingencies.

Example: You put $500 in escrow when signing; if you close, it credits toward the price, and if you cancel within your contingency, it is returned.

The difference between what a property is worth and what is owed against it. High-equity owners have room to accept a discounted cash offer and still walk away with proceeds, which makes them prime wholesale leads.

Example: A home worth $200,000 with a $40,000 mortgage balance has $160,000 of equity.

A neutral third party that holds funds and documents and coordinates closing, releasing money and transferring title only when every contract condition is met.

Example: Your earnest money sits in escrow until closing, protecting both buyer and seller.

The highest price a wholesaler should offer while leaving room for repairs, the end buyer’s profit, and the assignment fee. A common rule of thumb: MAO = (ARV × 70%) − repairs − your fee.

Example: ARV $200,000 × 70% = $140,000; minus $30,000 repairs and a $10,000 fee = a $100,000 MAO.

An owner who needs to sell quickly because of financial hardship, an inherited or vacant property, divorce, relocation, or looming foreclosure. Motivation — not just a low price — is what makes a wholesale deal possible.

Example: An out-of-state heir who inherited a home they never visit is often willing to trade a discount for a fast, as-is sale.

Replacing one contract or party with a new one that all parties agree to, so the original obligation is fully substituted rather than merely assigned. In wholesaling, a novation agreement can let an investor improve and market a property under a new agreement with the seller.

Example: Instead of assigning, you and the seller sign a novation that lets you list and sell the home while the seller stays on title until closing.

A property for sale (or gettable) without a public MLS listing, reached directly through the owner. Off-market deals face less competition, which is where wholesale margins usually come from.

Example: You reach a vacant-home owner by mail before they ever call an agent, and negotiate directly.

Documentation showing a buyer has the cash available to close — a bank statement, a hard-money pre-approval, or a transactional-funding commitment. Sellers and title companies often require it before accepting an offer.

Example: Your end buyer sends a recent bank statement showing $200,000 available, satisfying the seller’s POF request.

The core contract between buyer and seller setting price, contingencies, deposit, and closing date. In wholesaling it is the document you sign with the seller and later assign or close on.

Example: Your signed PSA locks the price at $120,000 with a 10-day inspection period and a 30-day close.

A property owner who has shown potential interest in selling, captured through marketing, a seller website, or direct outreach. Working seller leads consistently is the top of the wholesale pipeline.

Example: A homeowner fills out your “sell my house fast” web form — that inquiry becomes a seller lead in your CRM.

Looking up current contact information — phone numbers, emails, mailing address — for a property owner, especially absentee or hard-to-reach owners, so you can start a conversation.

Example: An LLC owns a vacant home; skip tracing surfaces the managing member’s cell phone so you can call directly.

A review of public records confirming the seller’s legal right to sell and surfacing any liens, judgments, or encumbrances that must be cleared before clean title can transfer at closing.

Example: The search reveals an old tax lien that the seller must pay off before closing so the buyer receives clear title.

A strategy where an investor puts a property under contract at a discount and then assigns that contract (or double-closes) to an end buyer for a fee, without renovating or holding the property. The wholesaler is paid for finding and controlling the deal, not for owning it.

Example: You contract a distressed home at $120,000, assign it to a flipper for $130,000, and never take ownership.