Definition
Wholesaling is when someone signs a purchase contract on your house and then sells that contract to a different buyer, pocketing the difference instead of ever owning the property themselves. As a homeowner, you're dealing with a middleman whose profit comes purely from the spread between what you agreed to and what they can get an end buyer to pay. The deal only actually closes if that end buyer is found in time and follows through, which means your closing date can slip or the price can be renegotiated downward at the last minute. Wholesalers often advertise aggressively and make offers quickly, sometimes before ever setting foot in the house. It's worth understanding this model because a signed contract with a wholesaler isn't the same thing as a guaranteed sale. Knowing the difference lets you ask the right questions before you take your house off the market.
Example
Maria signs a contract to sell her late mother's house for $190,000 to a buyer who promises a two-week closing. Two weeks later, the buyer says they need another 30 days because they're 'still lining up financing,' then comes back asking her to accept $178,000 instead. Frustrated, Maria talks to a real estate attorney friend who explains that her buyer likely never intended to close in their own name; they were shopping her contract to find someone willing to pay more than $190,000. Because her original contract had a firm 30-day closing deadline with no extension clause, Maria is able to cancel and keep her earnest money deposit. She then calls a company that buys with its own funds instead of relying on a resale. SilverCrest buys directly with cash we already have, so the number we sign is the number we close on, and Maria closes eight days later at $184,000 with no last-minute surprises.