Wholesaler's and Due Diligence and Transparency

[Patrick Scifres]

I have a new client who found a property here in Memphis, TN that he was interested in maybe purchasing.  The property was on Zillow and was listed for sale by a wholesaler.  Now before you jump to conclusions and think I'm about to bash wholesaling, I'm not.  I think there is a place for wholesaling in the RE business.  The company I work for has many wholesaling connections and has done a lot of deals with wholesaler's.  Wholesalers and agents need each other, because what you find on "Zillow" may not always be correct.

I have several issues I would like to address.

First,  I reached out to the company yesterday, and heard nothing back.  The company get's in touch with client today.  My client clearly states that he has signed an exclusive buyers agreement with me and gives them my name.  Without hesitation they ask him to sign a contract and send it back to them.  The first thing that should have been done was for the company to call me.  I understand that all agents don't understand wholesaling and some may frown upon it, but give it shot.  Call the agent tell them about the property and be as transparent as possible without giving up all the details of the negotiation.  A great partnership may just happen.

Second, the company states to my client that there are no back taxes on the property, which there clearly are back taxes.  I had already discussed this with the client.  Over $3,200 worth of back taxes.  Memphis and Shelby County tax records are online, easily accessible to everyone on the planet.  Or do it the old fashion way and pick up the telephone.  The company explains that the local title company said there were no back taxes, obviously not a true statement.

My client did not sign the contract and immediately called me.  I advised him not to sign the contract and I would call again.  I called and spoke with a gentleman who told me also, there were no back taxes, and explained the title company said there were no taxes.  I told him he might need to check again.  The company has more properties in Memphis that are being sent to me to view.

If your in the RE business, in any role, as an agent, wholesaler, investor, please do your due diligence on your deals.  When you give false or misleading information it makes people lose trust.