Wholesale vs agent sale

[VeinTwain H.]

So am I the only agent puzzled why people use whole sellers? I watched a guy mark up a sell for a property so he can get a huge payout why not just go with an agent where at least you know our commission from the beginning this guy charged double what I would have made

[Eric F.]

A deal is a deal. If the numbers work for the buyer then who cares what the seller makes? That is small minded thinking. If I sell a house to a rehabber, and he thinks he will make 40k off it, why should he care if I make 20k or 5k? I wouldn't. If a wholesaler brings me a great deal I don't care what he makes. I hope it is a lot so they stay in business. Good wholesalers are hard to find. Ones @John Thedford talks about in every thread on this forum are a dime a dozen, but they don't last more than 3 months before you never see them again. The free market solves that problem. 

Basically, professionals don't care what other professionals make. If someone agreed to a price then got mad that I made too much I wouldn't deal with them again. It has not happened to me yet. I am pretty sure every time I have sold a house to a rehabber they knew what I made. And you can bet your butt it was more than 3% of the sale price! 

Agents don't regularly bring deals in my market (btw technically they are all brokers here). They have MLS properties, and anything worth a darn on the MLS receives multiple bids in 24 hours in my market. I would love to be able to buy deals off the MLS regularly through a broker instead of having to hustle for them. I really would. But where I live the market is just too hot. If I could dial up the MLS now and find 10 great cash flowing holds here I would be all over it.

Let me put it to you another way. You are a professional rehabber.

You have two houses you can buy, both which have an as is value of 100k. This is a totally realistic scenario by the way. If anything, the gap between the wholesaler price (from a real wholesaler) and the MLS would be even larger (again, in my market, everyone's market is different)

• One is from me, I will sell it to you for 80k and I make 15k
• The other is from the MLS. It will cost 94k. The agent will make $2,800

Which do you buy? I mean seriously, think about your question objectively. Why would anyone care what anyone made? The price the buyer paid is what matters. Your entire question is based on the premises the wholesaler's profit being larger than an agent's commission is the most important factor in the transaction. What you pay is always the most important factor. When you shop for insurance do you look at your premium price or the agent's commission? Would you pay more money for a Chevy at one dealer if you knew the sales commission was less there?

I understand the value an agent adds. I am not being dismissive of them. I just think this question shows a bad mindset when it comes to business. Your thinking is all wrong. Worrying about other people's pockets all the time doesn't lead to growth and success in the long run.