What is Inspection Period?
An inspection period (also called due diligence period or feasibility period) is a contractual window — typically 7-14 days — during which a buyer can cancel a purchase contract without penalty and recover earnest money. The wholesaler's primary tool for risk-free deal control.
During the inspection period, the buyer can conduct inspections, run title searches, do feasibility analysis, talk to lenders, and assign the contract. If they decide not to proceed for any reason — or no reason at all in most contracts — they can cancel and recover their earnest money in full.
For wholesalers, the inspection period is the entire ballgame. A 14-day inspection period gives 14 days to find an end buyer, sign an assignment, and close. If no buyer materializes, cancel during the inspection period and walk away cleanly.
Sellers naturally push to shorten the inspection period (3-7 days, or none); buyers push to extend it (14-30 days). Standard practice in most markets is 7-10 days for residential, longer for commercial. Always written into the purchase agreement explicitly, with the cancellation procedure spelled out.
Concepts that connect.
Wholesaling is the real-estate strategy of putting a distressed property under purchase contract and assigning that contract to a cash buyer for a fee. The wholesaler never owns the property — they're paid for connecting motivated sellers to investor buyers.
Earnest money is the deposit a buyer puts down at contract execution to demonstrate commitment. In wholesale deals, EMDs typically range from $10 to $1,000 — far smaller than retail. The EMD goes toward closing costs at closing, or to the seller if the buyer defaults.
An option fee is a non-refundable payment a wholesaler makes to a seller for the exclusive right to buy a property within a specified period (typically 30-90 days). Different from earnest money — the option fee buys time, not commitment to close.
An assignment fee is the amount a wholesaler is paid for assigning the rights of a real estate purchase contract to an end buyer. Typical fees in 2026 range from $5,000 to $25,000 on single-family deals, depending on the spread and the market.
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