Inspection Period / Due Diligence Addendum
A standard addendum to a purchase agreement granting the buyer (typically the wholesaler) a defined inspection period during which the contract can be canceled and earnest money returned. The wholesaler's primary risk-management tool.
- Defined inspection period (7-14 days typical)
- Cancellation right with written notice
- Earnest money return clause
- Optional extension language
- Attach to your purchase agreement at signing
- Mark the deadline on your calendar (and your CRM)
- If unable to find an end buyer by the deadline, deliver written cancellation notice on or before the last day
- Always confirm the title company received your cancellation notice — assume nothing
Copy below, or download.
INSPECTION PERIOD / DUE DILIGENCE ADDENDUM This Addendum is made part of the Purchase Agreement dated ____________________, between: Buyer: ____________________________ Seller: ____________________________ For property at: ____________________________ 1. INSPECTION PERIOD. Buyer shall have a period of ____ calendar days from the Effective Date (the "Inspection Period") to conduct any inspections, investigations, due diligence, title review, and feasibility analysis Buyer deems appropriate. 2. RIGHT TO CANCEL. At any time during the Inspection Period, Buyer may, in Buyer's sole and absolute discretion and for any reason or no reason, terminate this Purchase Agreement by delivering written notice of termination to Seller and to the escrow holder. 3. RETURN OF EARNEST MONEY. Upon timely cancellation by Buyer during the Inspection Period, the escrow holder shall return ALL earnest money deposits to Buyer within 5 business days, without offset, deduction, or requirement of Seller's signature on the release. 4. NO DEFAULT. Buyer's exercise of the right to cancel during the Inspection Period shall not constitute a default and shall relieve Buyer of any further obligation under the Purchase Agreement. 5. EXTENSION (OPTIONAL). The Inspection Period may be extended by mutual written agreement of Buyer and Seller. If extension is not granted in writing, the Inspection Period expires at 11:59 PM local time on the final day. 6. ACCESS. Seller shall provide Buyer reasonable access to the property during the Inspection Period for Buyer's inspections, inspector visits, and any walkthroughs Buyer arranges with potential assignees. 7. NOTICE METHOD. Notice of cancellation must be in writing and delivered by email (to the email address(es) listed in the Purchase Agreement) AND by either physical delivery, certified mail, or courier service. Buyer: Seller: ________________________________ ________________________________ Signature Signature ________________________________ ________________________________ Printed Name Printed Name Date: ___________________ Date: ___________________
- Some states have specific requirements for inspection-period addendums (notice methods, minimum periods). Verify state-specific rules.
- Sellers will sometimes push back hard on long inspection periods (14+ days). Negotiate, but never go below 7 days — that's not enough time to find an end buyer.
- ALWAYS deliver cancellation notice in writing to BOTH the seller AND the escrow holder before the deadline. Verbal cancellation does not protect your earnest money.
Deeper context.
Terms referenced in this template.
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.
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.
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.
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.
REI utility library.
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