Wholesaler vs. Real Estate Agent

[Elias S.]

I am trying to figure out the difference between buying from a wholesaler and working with a real estate agent who deals in foreclosures, short sales, REO's, etc. Thanks.

[Jon Holdman]

IMHO there is very little difference. Wholesaling and brokering is essentially the same job.

If you're buying off the MLS, work with an agent. Wholesalers who find properties on the MLS then try to resell them are, IMHO, adding very little value. Short circuit that process and just buy directly from the MLS. Almost all REOs are listed on the MLS, so that's the best path for finding those.

Now, a good wholesaler, who gets out there and beats the bushes and finds real deals can be a valuable asset, too. If a wholesaler brings you a good deal, buy it.

A deal's a deal, regardless of the costs. Commissions and wholesaler fees are both baked into the price. If you like the price you can pay, its a deal. I'd take a good deal regardless of the source. Conversly, don't lock yourself into a single source. Some agents want exclusive buyer's agent contracts where you will pay the agent a commission if you buy ANYTHING during the period of the contract, even if the agent is not involved. Avoid these. If an agent brings you a deal, they deserve a commission. But if you find the deal elsewhere they, in my opinion, don't.

Now, there are a lot of legal tactics wholesalers use to avoid being an unlicensed broker. But at the end of the day, they're finding buyers, finding sellers and putting them together.

By the way, good name, Elias Shahvar! That's my son's name.