What's with the animosity towards whole-salers?

[Bill Plymouth]

Perhaps I'm generalizing, but I see some heavy hostility towards the idea of whole-saling in the forums.  Why do a lot of members seem to be so against wholesale?  I've seen "unethical" and "shady" thrown around a lot when discussing the topic.  What are your thoughts?

[Marcus Auerbach]

Okay, I disagree with a lot of the comments here from agents and will make 

a case FOR wholsalers!

Yes, sure, many newbies have no clue, have been mislead by a guru that this is the easy way (haha!) to get started, and some, well some are shady. But none of these guys make it very long, natural selection takes care of that.

The ones who survive and thirve are very skilled and educated (more than many agents, have to say it), operate with a high level of integrity (because they know your good name and reputation is everything in our business) and just run a very good and solid business overall.

And here is where they provide value to our industry and society. 

There is a market segment agents can't successfully operate in - neighborhoods with properties below 100k, manybe even 150k. The cost of doing business (professional, full service brokerage) is too high to allow an agent to survive on sub 100k properties. The percentage based comission structure is based on median priced homes (in Milwaukee 225k) and you can't just go down in price and still cover all fixed expenses using the same percentage. And yes, of course there is some overlap both ways..

This market requires a much different approach and wholesalers can provide that. They have a cost structure that allows them to operate profitable in that space. They can market properties that are in a condition most residential agents won't touch. They can accomodate time lines that a traditional sale can't handle and fulfill needs that would go otherwise unaddressed.

Without wholesalers (and their buyers) we would have a huge problem in many municipalities. They perform a vital function in our society recycleing properties in need. I can't provide this as a licensed broker with my business model and overhead burden and compliance.

BTW - there is a new breed of wholesalers and they reside in corner offices of billion dallar institutionals: iBuyers. They take the classic wholesale approach (cash, fast) to higher price points and offer instant cash offers to residential homeowners at any price point. Zillow iBuyer, Opendoor, Knock, Redfin to name a few..  not yet in Wisconsin, but in selected metro areas along the coast and growing.

I view a wholesaler as much as competition as a commercial contractor sees a residential contractor as competition - or vice versa - not at all, it's a different market segment I have no business to be in and I am glad we have wholesalers!