If someone has approached you with a cash offer on your home — or you're researching your options before reaching out to buyers — you may be dealing with a real estate wholesaler without realizing it. It's more common than most sellers expect, and understanding how wholesaling works can save you a lot of frustration.

This guide explains what wholesale real estate is, how wholesalers operate, and what the risks are for sellers. It also covers why working directly with an end buyer like Wedgewood Homes is a more reliable path to closing.

What Is Wholesale Real Estate?

Wholesale real estate is a short-term investment strategy where someone — called a wholesaler — puts your home under contract and then sells that contract to another buyer before closing. They never actually purchase the property themselves. Instead, they profit from the difference between the price they locked in with you and the price they sell the contract to an investor for.

Here's the basic sequence:

• A wholesaler contacts you (or you reach out to them) and negotiates a purchase agreement.
• Instead of closing on the home themselves, they find a third-party investor to take over the contract.
• That investor pays more than the original contract price — the wholesaler keeps the difference as their fee.
• The investor, not the wholesaler, is the one who ultimately buys your home.

Wholesalers tend to target homes that are distressed, need significant repairs, or where the owner needs to sell quickly. The appeal for sellers is speed and simplicity. But as we'll cover below, the process comes with real risks.

How Real Estate Wholesaling Works: The Three Main Methods

Not all wholesaling looks the same. There are three common contract structures you might encounter:

1. Assignment Contracts: The Most Common Wholesale Real Estate Contract

The most common approach. The wholesaler signs a purchase agreement with you that includes an "assignment clause" — language that lets them transfer their rights in the contract to another buyer. They then find an investor willing to pay more, assign the contract over, and collect the difference as an assignment fee.

What this means for you: the person you negotiated with won't be the one buying your home. A stranger to the transaction becomes your buyer, and you may not know who that is or what their intentions are until shortly before closing.

2. Double Closings

In a double closing, the wholesaler actually takes ownership of the property — briefly — and then immediately sells it to an end buyer, often the same day. Two back-to-back transactions happen in quick succession.

What this means for you: this method is used when the wholesaler's profit margin is larger and they want to keep it less visible. It can also introduce financing complications and higher closing costs.

3. Novation Agreements

Less common, but worth knowing. A novation replaces your original contract with a new one that brings in the end buyer directly. The wholesaler earns a fee once the new buyer closes.

What this means for you: the process adds complexity and introduces risk if the wholesaler can't find a buyer before the contract deadline.

What Happens If a Wholesaler Can't Find a Buyer?

This is the question most sellers don't think to ask — and it's one of the most important ones. Wholesaling depends entirely on the wholesaler's ability to find an investor willing to pay their asking price. If that doesn't happen, here's what can play out:

They walk away using contingencies.

Most wholesale contracts include inspection or financing contingencies that allow the wholesaler to exit the deal legally. You're left back at square one, having spent weeks waiting for a closing that never came.

They renegotiate the price.

If they can't assign the contract at the price they need, wholesalers often come back to the seller asking to lower the purchase price. This is sometimes called a "price reduction" late in the process, after you've already mentally moved on.

They extend the closing date.

Wholesalers may ask for more time to find a buyer. If you're on a tight timeline — dealing with an inherited property, relocation, or a life change — this delay can have real consequences.

They forfeit a small earnest money deposit.

Wholesalers typically negotiate very low earnest money — often 1–2% of the purchase price. If the deal falls apart, you may receive that small deposit as compensation. It rarely comes close to covering the time and opportunity cost of a failed sale.

For sellers who need certainty, these outcomes are more than inconvenient — they can be genuinely damaging.

How to Tell If You're Dealing With a Wholesaler

Wholesalers don't always identify themselves as such. Here are signs you may be in a wholesale transaction:

• The contract includes language like "and/or assigns" after the buyer's name
• The earnest money deposit offered is unusually low
• The buyer asks for an extended inspection or due diligence period
• You're told the buyer may need to "bring in a partner" or "transfer the contract"
• The closing timeline keeps shifting or the buyer seems to be stalling

If you're unsure, ask directly: "Are you the end buyer, or will this contract be assigned to someone else?" A legitimate buyer will give you a straight answer.

Why Wedgewood Homes Is Different

Wedgewood Homes is not a wholesaler. We are the end buyer — the company that purchases your home, renovates it, and resells it. There's no middleman, no contract assignment, and no uncertainty about who you're selling to.

Here's what that means in practice:

The offer we make is the offer we honor. No reassignment, no last-minute price reductions, no mystery investors.

We don't charge fees or commissions. The number we quote is what you walk away with.

We close on your timeline. Whether you need two weeks or a few months, we work around your schedule.

We buy homes as-is. No repairs, no prep, no showings. This is especially valuable for homeowners with inherited properties or rental properties they'd rather not invest in before selling.

Your information stays with us. We're focused on buying your home — not generating leads to sell to other investors.

Ready to Skip the Uncertainty?

If you've been contacted by a cash buyer and aren't sure whether they're a wholesaler or a direct buyer, or if you're just exploring your options, Wedgewood Homes is happy to give you a straightforward, no-obligation cash offer. No contracts with assignment clauses. No waiting to see if a deal falls through.

Get your cash offer from Wedgewood Homes — and know exactly who you're selling to.