Wholesaler renegotiated the contract after they assigned it

[Joe S.]

So I’ve had this happen twice in a relatively short period of time and I’m a bit confused about it.

The first time it stood out I went and looked at a property and I told the wholesaler I could only give X and they guilt trip me saying they only was making 5k as it was.

So we did an assignment of contract and I agree that they needed to make something and it was a marginal deal for both parties.
Then the day of the closing I get the HUD and the wholesalers is making 15 K. So basically the Wholesaler renegotiated the original contract after they told me they was only making 5k and and showed me the contract. I disclosed to my lender that the Wholesaler was making 5k so then it made me look like I was lying to my lender when the HUD clearly showed the Wholesaler was making 15 K

I recently had another transaction where a Wholesaler renegotiated a lower price after the fact.

I’m assuming that where the wholesalers have that ability to make that extra is that they are naming the price that the buyer is willing to pay and not necessarily naming the dollar amount that they are assigning their contract for so this gives them the leeway to keep trying to get a lower price from the original seller, even after the fact of going through the motions of transferring their rights to the property to a new buyer.

Is this a common practice that you have seen and what’s your thoughts?

[Russell Brazil]

It's called fraud by inducement. It's a crime to lie to someone to get then to enter a contract.