Agent Avoidance

[Kathleen Miles]

Why would real estate agents who claim to be "investor friendly", not want to work with an investor who is wholesaling?

[Ed Neuhaus]

Wholesaling, at least as I know it is a harder sell.  I am a broker and investor in TX, and the wholesellers around Austin want $5k to get a property.  That is 5k up front with no option time. 

From a broker's stand point, that is a huge risk if I rep the buyer.  I want them to get an inspection and do some homework before they close the deal.  Also a buyer can start the process of buying a home from a non wholeseller for less than $1000.  It's even worse if I rep the wholeseller.  They often times know nothing about the property, and are not going to give the buyer any time for an inspection.  From a brokers standpoint, we want things nice and slow, lots to time to understand exactly what we are buying, and for the most part refundable if things are not as we expected.  We do all this so we don't get sued.  

From an investors stand point a wholesale deal with no option period to inspect the property is a risk. In my example I risk 5K if i don't move forward. If the deal was really that great then it would not be a problem, the reward would be worth the risk. For the most part in the Central Texas area wholesellers are using next years prices now. The whole market is crazy. Usually I see home wholesale for at 80% ARV but are marketed as 60% AVR. Which is why I don't mess with wholesellers and why I don't want my clients to either.