Wholesaling glossary

Every term you'll run into, in plain English. No jargon inside the definitions — if a word needs another word explained, that one is in here too.

Absentee owner: An absentee owner is someone whose mailing address differs from the property address — usually a landlord or an inherited-property owner who lives elsewhere. They're a standard list to market to because managing a property from a distance often wears thin.
ARValso: After-repair value: ARV is what a property will be worth once it's fully renovated. Every number in a wholesale deal is derived from it, so getting it wrong is the fastest way to blow up a deal — an ARV guessed high makes a bad deal look good right up until no buyer will touch it. Read more →
Assignmentalso: Assignment of contract: An assignment is the transfer of your purchase contract to another buyer, who then closes with the seller in your place. You're selling your right to buy the property, not the property itself — which is why wholesaling doesn't require you to own anything or bring the purchase money.
Assignment fee: The assignment fee is what you get paid for handing your contract to the end buyer — the difference between what the seller agreed to and what the buyer pays. It's typically disclosed on the closing statement and paid at closing by the title company.
Buy boxalso: Buying criteria, Investment criteria: A buy box is the specific set of criteria an investor buys within: property type, price range, beds and baths, square footage, condition, and the areas they'll go to. Matching a deal against a buy box is the difference between calling forty investors and calling the four who actually want it. Read more →
Buyers list: A buyers list is the set of cash buyers a wholesaler can call when a deal comes up, along with what each one buys. The value isn't the number of names — it's knowing which of them wants the specific house you have right now. Read more →
Cash buyer: A cash buyer is an investor who can close without a mortgage — usually a flipper, a landlord, or a buy-and-hold investor with their own funds or a private lender. They matter to wholesalers because they can close fast and won't be stopped by an appraisal or a lender's condition requirements. Read more →
Compsalso: Comparable sales: Comps are recent sales of similar nearby properties, used to work out what a house is worth. Good comps are close by, recently sold, and genuinely similar in size, age, and condition — a sale a mile away in a different school district isn't a comp. Read more →
Dispositionalso: Dispo: Disposition is the half of wholesaling that happens after you have a property under contract: finding the cash buyer and assigning the deal before your contract expires. Acquisition gets most of the attention, but disposition is where deals actually die. Read more →
Distressed property: A distressed property is one in poor physical or financial condition — needing significant repairs, behind on taxes, in foreclosure, or long vacant. These are the properties a cash buyer wants and a traditional retail buyer can't finance.
Double closealso: Back-to-back closing: A double close is when you actually buy the property and then immediately resell it, instead of assigning the contract. It costs more in closing fees and usually needs transactional funding, but it keeps your fee private and works where assignment is restricted.
Driving for dollars: Driving for dollars is physically driving neighborhoods looking for distressed properties — overgrown yards, boarded windows, obvious deferred maintenance — then tracking down the owners. It's free, it's slow, and it's inherently limited to where you can drive.
Earnest moneyalso: EMD, Earnest money deposit: Earnest money is the deposit you put up when a seller signs, held by the title company to show you're serious. In wholesaling it's usually small, and the contract's inspection period normally lets you recover it if the deal falls apart in time.
MAOalso: Maximum allowable offer: MAO is the most you can pay a seller and still leave room for a cash buyer's margin and your own fee. The standard formula is MAO = (ARV × 70%) − repairs − your fee. The math is simple; the two inputs — ARV and repairs — are what people get wrong. Read more →
Motivated seller: A motivated seller has a reason to sell quickly that matters more to them than getting top dollar — an inherited property, a job relocation, a tired rental, a looming foreclosure. Motivation, not the house, is what makes a wholesale deal possible. Read more →
Proof of fundsalso: POF: Proof of funds is documentation showing a buyer has the money to close — a bank statement or a lender letter. Sellers and agents ask for it, and a cash buyer who can't produce one quickly is usually a wholesaler themselves.
Skip tracing: Skip tracing is turning a name and an address into a phone number and email. Wholesalers use it on absentee owners, vacant properties, and the LLCs behind cash purchases. Two flags matter before you dial: do-not-call registration and litigator status. Read more →
Spread: The spread is the gap between what you agreed to pay the seller and what your buyer will pay you. It has to cover your fee and still leave the buyer enough margin to make the project worth doing — a spread that only works for you isn't a deal.
Title companyalso: Closing attorney: A title company handles the closing: verifying clear title, holding earnest money, and disbursing funds — including your assignment fee. Not every title company is comfortable with assignments, so it's worth asking before you need one.
Under contract: A property is under contract once the seller has signed your purchase agreement. From that moment you have a defined window — often two to three weeks — to find a buyer and assign it, which is why disposition is a timed problem rather than an open-ended one.
Virtual wholesaling: Virtual wholesaling is wholesaling in a market you don't live in — finding sellers by phone, signing electronically, and never seeing the property. The acquisition side was always doable remotely; the buyer side is what used to make it hard. Read more →
Wholesaling: Wholesaling is getting a property under contract and then assigning that contract to a cash buyer for a fee, without ever owning the property. Your profit is the spread between the price the seller agreed to and the price the buyer will pay. It's a sales business with two halves — finding motivated sellers, and having buyers ready when you do. Read more →