What is an inspection period in a wholesale contract?
An inspection period, also called due diligence, is a set number of days after signing when the buyer can inspect the property and cancel the contract and recover their deposit. Wholesalers use it to find an end buyer without being locked into the purchase.
Longer periods give you more time to market the deal, but sellers may push back. Agree a length that gives you time to find a buyer and give the seller certainty.
Know the exact deadline. Cancel or assign before it ends, or you may lose your deposit.
Common mistakes
- Counting days wrong, such as calendar versus business days.
- Asking for an extension on the last day.
- Treating the inspection period as unlimited time to find a buyer.
More questions
How long should an inspection period be?
Long enough to inspect and find a buyer, but sellers may push back on longer periods. Agree a length you can actually meet.
Can I extend an inspection period?
Only if the seller agrees, in a signed addendum before the period ends. Ask early, not on the last day.
Is the inspection period the same as a cancellation right?
No. The inspection period is a contract term. Some states also give sellers separate statutory cancellation rights in wholesale deals.