A wholesale deal is only as safe as its escrow. Your earnest money must sit with a licensed title company (Ohio, Texas) or closing attorney (Georgia, where non-attorney closings are prohibited), your assignment fee must appear as a line item on the settlement statement, and the deed must record simultaneously with disbursement. Any deviation from those three mechanics is where wholesale fraud lives. Here is the exact anatomy, and the three-question check that filters every counterparty, including us.
KEY FACTS FROM THIS GUIDE
- Earnest money belongs in title company escrow, never a personal account
- Assignment fees are paid on the settlement statement, or they are not legitimate
- Texas Prop. Code 5.086 requires disclosure of equitable-interest assignments
- An owner title policy covers forgeries, missed liens and chain-of-title defects
Earnest money: location and refund mechanics
On signing the assignment, your deposit wires to the escrow account under the property file number, never to the wholesaler’s operating account. Inside the inspection period it is refundable on written notice, that is the entire purpose of the period. After it expires the deposit goes hard, standard in all three states, but it still sits in escrow until closing and still appears on the settlement statement as your credit. Confirm receipt by calling the title company directly; a legitimate file has your name on it.
The assignment fee: on the statement or nowhere
The fee is a disclosed line item paid at closing from escrowed funds. The dominant wholesale scam is the off-statement fee: pay us $5,000 by wire today to lock the deal, then the contract evaporates. The cure is procedural, not psychological: no fee, deposit or transfer of any kind outside the closing statement. Texas codified transparency here, Property Code 5.086 requires disclosure of equitable-interest assignments, and title companies in all three states are accustomed to papering assignments and double closings correctly.
Audit us with the 3-question check, then decide. Written numbers, licensed title company closings, zero pressure.
What closing day delivers you
A deed recorded in your name or your LLC (grant deed practices vary: general warranty is common in Texas residential closings, limited or fiduciary deeds appear in distressed and estate contexts, your title commitment states which). An owner’s title insurance policy covering the chain behind that deed. A settlement statement itemizing seller payoff, liens cleared, our fee, your funds. Those three documents survive every future dispute; file them.
The three-question counterparty check
Ask which title company holds escrow, then call and confirm the file. Ask to see the underlying purchase contract, confirm it is signed and unexpired, because an assignment of a dead contract assigns nothing. Ask for the inspection period and refund terms in writing. A counterparty that answers all three in one email is showing you their operating system. One that stalls on any of them has answered a different question.
Quick answers
Is an assignment legal in Ohio, Texas and Georgia?
Yes in all three, with Texas adding the 5.086 disclosure requirement. What matters is execution through escrow with the underlying contract intact.
What if the seller backs out before closing?
Your earnest money returns per the contract terms, from escrow, which is exactly why it must sit there and not in anyone’s operating account.
Can I use my own title company?
Often yes, especially on double closings. Where the seller-side contract already names one, we tell you upfront and you can still have your attorney review the file.
Run the three-question check on us today: join the buyer list and ask them in your first reply, or book a call and go through this page line by line. Buyers who audit us hardest become our longest relationships.