What to say to Realtors?

Question

Let's say you're trying to wholesale. Let's also say you're considering  listed properties in addition to non-listed. Finally, let's say that a Realtor  asks you what you plan to do with the property -- fixing and selling it or renting  it out, etc? How do you answer that question? I'm pretty sure Realtors aren't  crazy about wholesalers, making it very difficult to say "I'm going to wholesale  it," but I also don't see how it's possible to keep it from them. For those who  have faced this issue, any thoughts?

Thomas I. · Answer

I get asked this quesiton all the time by sellers.  I answer the same way every time.

"It depends.  Sometimes, I buy them to fix and flip. Other times I will fix them and put a tenant in there for a long term rental property for my portfolio. Or sometimes I may just wholesale it to another investor if it fits their portfolio better than mine.  It really just depends on how the timing and numbers shake out"

Kyle J. · Answer

Be honest with them.  Trying to lie or get creative with your explanation for what you're going to do with it would be dishonest and short-sighted (you'll end up with a bad name for yourself and no other realtors will want to deal with you).  They're going to find out anyway.

Ultimately, I think you'll find it very difficult to wholesale listed properties though.  After all, if it's listed, then it's publicly advertised and available to anyone.  Why would someone need/want a wholesaler to be the middleman (and presumably add their fee onto the listed price)?

Also, the reason the realtors are likely asking what you're going to do with it in the first place is because they want to assess your ability to close.  They aren't likely to let you tie up the property while you try to wholesale it if you don't personally have the ability/intention of closing in the event you can't find a buyer.  So they'll likely want to see your proof of funds or financing approval along with your offer to make sure you're a serious/real buyer.

I'm not saying it can't be done, but you'll probably be a lot better off focusing your time and efforts on off-market properties.

Joel Owens · Answer

Just be honest.

Deception gets you nowhere long term in this business.

The reality is in the markets lot's of buyers with real cash to play. So most brokers/agents will be looking for a qualified buyer with some down to direct purchase or an all cash buyer.

Any broker/agent worth anything will not let a wholesaler with little or no cash to close tie up a property with little to nothing down. It's bad for the seller and ties up their property with a fee collector who can't perform if they do not land a real buyer. This isn't always the case but lot's of times it is.

Brian Gibbons · Answer

Hi Jordan,

I used to live in Cross River - Katonah - Bedford Hills.

Realtors want a good reputation for doing well for their home sellers.

Wholesaling is not what builds a listing agent's reputation.

So go after expired listings and LONG days on the market DOM

Offer CASH OR TERMS

Learn Creative financing eg

• Sub2
• Wrap
• Seller Carry
• Lease Purchase - Sandwich
• Lease Option and Assign
• JV with Seller on a Minor rehab

Wholesaling is 1 out of 300

Terms deals are all day long.

Good luck!

And consider getting a license, focusing on expired listings.

Neal Collins · Answer

I'm not sure it comes down to finessing or being explicit. I think @Kyle J. raises a very important point...why would any investor go through a wholesaler to purchase a listed property and pay more than they would just picking it up with a realtor? It seems counterintuitive unless you 1) know something about the property and its potential that no one else does, or 2) you have a very naive investor that will probably feel a bit jaded once they see that the property was listed.

Passing up a pay day isn't fun, but do you really want to be doing those kinds of deals? If it were my reputation on the line I personally would pass. Giving someone a heads up about a deal that is on the market doesn't hurt you at all and you gain some nice karma points.

Jordan Solomon · Answer

@Joel Owens You say "deception gets you nowhere long term in this business."

No, but there are ways to finesse things. Plus, right or wrong, I have to  wonder how many wholesalers are totally explicit about the fact that they're  wholesaling the property to another investor, even if it's just something like  referring to the buyer they find as a "funding partner." In fact, one could even argue that any wholesaler who says "I buy houses" (which almost all do) is being at least somewhat deceptive. I'm not saying it's good -- I'm just saying it's true.

Geoffrey Hoffman · Answer

I am not a wholesaler.  I know that there are legit wholesalers and wannabes.  I am always in favor of transparency and honesty- Not just with real estate but with any business.  If I tell someone "I will buy your house", I should mean it.  I'm not referring to bandit signs; I'm talking about actually making offers.

Jordan Solomon · Answer

@Geoffrey Hoffman Please see my post above. Are you a wholesaler? If so, do you ever advertise that you buy houses? Do you buy them, really?

My point is, of course, if you take that far enough, you could almost make that translate to "don't wholesale." Which, by the way, is a perfectly valid argument and the way many people feel. Just not me, yet at least.

Geoffrey Hoffman · Answer

Tell the truth.  Misleading someone who is trying to work in your best interest will get you nowhere.

If you deceive, mislead, lie to, "use finesse" , or conceal information from somebody you are trying to do business with (or anyone else in life, for that matter) - Don't expect honesty from them.

Wayne Brooks · Answer

For me, if you can't show the ability to buy it, it doesn't matter what you say you're going to do with it....you don't get past go.

What to say to Realtors?

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