How a wholesale deal works
- Contract with the owner. The wholesaler agrees a price and terms with the seller.
- Find an end buyer. The wholesaler offers the contract to investors.
- Assign or double close. The contract is assigned to the investor, or the wholesaler buys and immediately resells. A title company closes.
Texas rules
Texas Occupations Code §1101.0045 allows a person to sell an equitable interest in a contract without a real estate license, as long as they disclose to potential buyers that they are selling only their interest in the contract. Marketing a property you do not own as if you did is treated as brokering and requires a license. This is general information; ask an attorney about a specific deal.
What sellers should ask a wholesaler
- Will you close on this yourself, or might you assign the contract?
- How much is the earnest money, and when is it deposited with the title company?
- What happens if you cannot find a buyer? Can you cancel, and until when?
- Which title company will close?
We answer those questions in writing on every deal. Read how we wholesale.
General information, not legal, tax or financial advice. Laws and figures change; check the specifics for your situation.
Frequently asked questions
Is wholesaling legal?
Yes, in Texas and most states, when it follows state rules on disclosure and licensing. Rules differ by state.
How do wholesalers make money?
Usually from an assignment fee paid by the end buyer, or from the difference between the purchase and resale prices in a double close.