Can I Wholesale this property?

Question

Hello everyone!  I posted a few months ago that it's time to get started.

So here I am with my first deal under contract.  My realtor brought it to my attention when the seller approached him.  We walked the property with a contractor and I made the seller an offer, which he accepted.  At this point the property was not on the MLS.

My realtor said that he needed to put the property on the MLS and then as soon as he listed it he would write up my contract to purchase.

Did he really have to list the property first?

Shortly after he listed the property he started receiving calls about the property from other investors.  My contract is written up to purchase the property for 68k and my agent is saying that he is getting offers up to 85k.  I was initially planning to flip this property but this seems like a prime opportunity to get my feet wet and wholesale this deal.

Does anyone see any reason why I couldn't wholesale this deal?

Since my profit would be so good I would plan on doing a double closing.  The contract indicates that to assign the contract I would need the sellers written approval.  If I double close would I need the sellers approval for that as well?  Even so getting the sellers approval shouldn't be a problem.

Ryan Dossey · Answer

Sounds like you have the property under contract. So hire offers really wouldn't matter right now. You may be better off actually closing on the home yourself and then just relisting it at a higher amount. Basically a double close but just hold it a few days. Unless your agent will give you the contact info of people offering more.

Chaz Reid · Answer

I agree with Ryan Dossey . It sounds like you already have the property under contract so I wouldn't be stalling right now. Make some moves! Crunch some numbers and start marketing!

Andrew Jordan · Answer

Yes, I agree with the observations of my fellow colleagues above.  It sounds strange that your RE Agent is making things so complicated (or sound complicated).  The procedure should be fairly simple.  My guess coincides with others here - It sounds like his first priority is maximizing his commission.  If something stinks, there's a reason for it.

Patrick L. · Answer

@Kris Walker  Either he's unethical or unqualified.  Either way I'd be very careful in future deals with him.

Kris Walker · Answer

@Patrick L. Thanks that makes me feel better!  I'm believe my Agent mentioned that he wouldn't be taking both commissions.  Not sure if he just made a mistake or if he does have some other angle he is working.

Patrick L. · Answer

I don't think you've done anything wrong.  You agent is definitely pretty sketchy, it seems like he was really worried about double siding the commission rather than looking out for anyone's interests.  I wouldn't place much trust in this agent, but luckily you came out on the positive end of this deal.

Kris Walker · Answer

@Andrew Jordan  Agreed I'm definitely learning from this one!

What could I have done differently in this case to avoid these issues?  Agent brought me a deal, I made an offer and the seller accepted.

@Bill G.   Thanks very informative!  Not sure I understand your comment about the fee agreement,  I'll have to read up on that.  I believe I'll just flip the property as originally planned.  I'm sure I'll learn a lot going through the process of flipping it.

Andrew Jordan · Answer

This is very helpful information for what could go wrong with a first transaction of this type. Thanks for all of the information.  -just a newbie here :)

Bill Gulley · Answer

Before a Realtor or agent can accept a contract or be involved with an owner, they have to have an agreement for representation. The MLS/BOR that the agent is a member of is under an obligation to list properties within a certain period of time, like 24 hours to carry out the agency duties. The agent can accept a contract as soon as he forms an agency relationship, but they still need to enter the listing.

Say an agent gets a listing at 2pm, at 2:30pm you could write an offer, at 3:00 it could be accepted, at 5:00 it could be listed as being under contract. If the agent receives higher offers he must inform the owner.

The agent is obligated to inform the owner by law.

Can you wholesale, yes, if that offer was accepted and the contract doesn't restrict assignments. The issue will be that the sale price will be, say 85K, and you may have a commission to cover on that 20K, to keep that Realtor "involved" as they can probably kill the deal and the owner will be informed, if you aren't adding value to the deal, (there is an agent) then you'll have a rough time collecting. You'd probably have a mess, the Realtor will be caught in the middle, the owner will be ticked at you, the Realtor and anyone standing. That's reality. You can't list what you don't own but you can agree to a fee agreement for the transaction.

What you might get by with is less of a fee, being reasonable and chalk it up to experience and learn to use a transaction lender, buy it, take title, then relist it and sell it. :)

Wayne Brooks · Answer

Well, if the agent is getting higher offers, or should expect them, he IS screwing the Seller.  And no, "putting it on the MLS" isn't necessary for him to collect a commission, both sides in this case apparently.  But, putting it on the MLS does give the appearance of exposing it properly.

Can I Wholesale this property?

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