Wholesaler Due Diligence Checklist (Title, Liens & Red Flags)

You just got a property under contract. Now the real work begins. If you skip due diligence, you risk losing your assignment fee — or worse, getting sued. This checklist walks you through every step to verify title, liens, occupancy, and condition so you catch problems early.

Key takeaways

• Run a preliminary title search immediately after contract acceptance — don't wait for closing.
• Check for tax liens, judgments, and HOA liens; any of these can kill your deal.
• Verify occupancy in person and through utility records — vacant properties are your safest bet.
• Always order a professional inspection or at least do a thorough walkthrough.
• Have an exit strategy for every red flag: renegotiate, assign subject to inspection, or walk away.

What is wholesaler due diligence?

Wholesaler due diligence is the process of verifying everything about a property after you go under contract but before you assign or close. It's your chance to confirm the property is what the seller said it was and that you can legally and profitably assign the contract.

Think of it as a safety net. The more you verify upfront, the fewer surprises you'll face at the closing table. And in wholesaling, surprises usually cost you money.

Why is due diligence critical for wholesalers?

Because you're not buying the property — you're selling the contract. If the deal falls through after you've marketed it, your reputation takes a hit. Worse, if you assign a contract with hidden problems, the end buyer may come after you.

Due diligence protects your assignment fee and your credibility. It also helps you negotiate better terms with the seller or walk away from a bad deal before you've invested too much.

Phase 1: Title and ownership verification

Step 1: Order a preliminary title report

• Contact a local title company or real estate attorney to order a preliminary title report.
• Provide the property address and seller's name.
• Ask for a copy of the vesting deed to confirm current ownership.

Tip: Many title companies offer a "wholesaler" rate for preliminary searches. Ask upfront.

Step 2: Verify the seller's identity

• Check the seller's name on the deed matches the person who signed the contract.
• If the property is owned by a trust, LLC, or estate, confirm the signatory has legal authority.
• Request a photo ID and proof of ownership (e.g., tax bill, deed).

Warning: If the seller isn't the legal owner, the contract is void. Walk away unless they can get proper authorization.

Step 3: Check for liens and encumbrances

• Look for tax liens — unpaid property taxes can be a deal-killer.
• Search for judgment liens, mechanic's liens, or HOA liens.
• Note any easements or restrictions that could affect the property's value.

Tax liens are the most common issue. Even a small unpaid tax bill can balloon with interest and penalties. If the total exceeds your profit margin, you may need to renegotiate.

Step 4: Review the chain of title

• Confirm there are no breaks in the chain of title (e.g., missing deeds, probate issues).
• Look for any recent transfers that might indicate a quick flip or fraud.
• If the property was recently inherited, verify probate was completed.

Phase 2: Property condition and inspection

Step 5: Do a drive-by or walkthrough

• Visit the property at different times of day.
• Take photos and video of the exterior and interior (if accessible).
• Note obvious issues: roof condition, foundation cracks, boarded windows, overgrown yard.

Step 6: Order a professional inspection (if possible)

• Hire a licensed home inspector for a full inspection.
• If budget is tight, at least get a pest inspection and a roof certification.
• Review the inspection report for major structural, electrical, plumbing, or HVAC issues.

Tip: You can often negotiate with the seller to cover the inspection cost or reduce the price if issues are found.

Step 7: Check for code violations and permits

• Call the local building department to check for open permits or code violations.
• Ask if there are any outstanding fines or liens related to code issues.
• Verify that any recent work (e.g., additions, electrical) has proper permits.

Phase 3: Occupancy and tenant status

Step 8: Determine if the property is vacant or occupied

• Knock on the door and talk to neighbors.
• Check utility records — if utilities are off, it's likely vacant.
• Look for signs of occupancy: mail, cars, window treatments, lights on timers.

Step 9: If occupied, verify tenant details

• Ask the seller for a copy of the lease agreement(s).
• Confirm the monthly rent, security deposit, and lease term.
• Check if tenants are current on rent — request payment records.
• Verify if the property is rent-controlled or subject to eviction moratoriums.

Warning: Tenants with a valid lease can't be evicted just because the property sells. If you assign a contract with tenants, the end buyer must honor the lease.

Step 10: Check for illegal occupants or uses

• Look for signs of multiple families (e.g., extra kitchen, multiple mailboxes).
• Ask the seller if the property is used for short-term rentals (Airbnb).
• Verify zoning allows the current use.

Phase 4: Financial and market verification

Step 11: Confirm the ARV (After Repair Value)

• Pull comparable sales (comps) from the last 6 months within 0.5 miles.
• Adjust for differences in square footage, bedrooms, bathrooms, and condition.
• Use a conservative estimate — don't rely on the highest comp.

Step 12: Estimate repair costs accurately

• Get quotes from at least two contractors for major repairs.
• Add a 15-20% contingency for unexpected issues.
• Compare your estimate to the inspection report findings.

Step 13: Calculate your maximum allowable offer (MAO)

• Use the formula: MAO = (ARV × 0.70) – Repair Costs – Assignment Fee.
• Make sure your offer leaves room for the end buyer's profit.
• If the numbers don't work, renegotiate or walk.

Phase 5: Legal and contractual checks

Step 14: Review your contract for contingencies

• Confirm you have an inspection contingency (or a "subject to inspection" clause).
• Check the assignment clause — does it allow you to assign the contract?
• Note the closing date and any deadlines for due diligence.

Tip: Always include an assignment clause in your purchase agreement. If the seller refuses, consider using a double-close instead.

Step 15: Verify the seller's disclosure obligations

• Ask the seller to complete a property disclosure statement (if required by state law).
• Check if the seller has disclosed any known defects, deaths, or environmental hazards.
• If the seller refuses to disclose, consider that a red flag.

Step 16: Check for pending legal issues

• Search the county court records for lawsuits involving the property or seller.
• Look for foreclosure notices, bankruptcy filings, or divorce proceedings.
• If the seller is in bankruptcy, you may need court approval to proceed.

Red flags that should make you walk away

Not every problem can be fixed. Here are deal-killers that should trigger a hard pass:

Red Flag	Why It's a Problem	Action
Seller not on title	Contract is void	Walk away immediately
Multiple large liens	Total exceeds profit	Renegotiate or walk
Active probate without executor authority	Can't transfer clear title	Wait until probate is resolved
Unpermitted major renovations	Costly to fix; may require tear-down	Renegotiate with big discount
Tenant with long-term lease at below-market rent	End buyer can't raise rent for years	Disclose and adjust price
Structural foundation issues	Repair costs often exceed budget	Get structural engineer estimate before deciding
Code violations with fines	Fines transfer to new owner	Renegotiate or walk

How to handle issues found during due diligence

Renegotiate with the seller

If you find a problem that reduces the property's value, present the evidence to the seller and ask for a price reduction. Most sellers will negotiate rather than lose the deal.

Assign subject to inspection

If you're unsure about a major issue, you can assign the contract "subject to buyer's inspection approval." This shifts the risk to the end buyer but may reduce your pool of buyers.

Walk away (and know your contract terms)

If the deal is unsalvageable, exercise your contingency and cancel the contract in writing. Make sure you understand the deadline and any penalty for backing out.

Recommended tools / next steps

Use a title company you trust for preliminary searches — they're your first line of defense. For inspections, build a list of reliable contractors who can give quick quotes. And always use a contract with strong contingencies. Next, check out our wholesaling software directory to find tools for comps, CRM, and deal management.

• Run title search
• Verify seller identity
• Check liens
• Inspect property
• Confirm occupancy
• Calculate ARV and repairs
• Review contract contingencies
• Decide: proceed, renegotiate, or walk