is it me or do some realtors not understand what us wholesalers are about?

Question

Hi guys,

I just wanted to hear some thoughts, I have a great realtor I work with in getting bank owned homes, but I was looking to add 1 or 2 more to my team. The more the marrier. I went on the reo realtor website and searched for all the realtors in my area that get listings straight from the banks. I e-mailed about 20 of them, and simply introduced myself and said what I do, some e-mailed back and said things like "oh those are murky waters" or this is not the time to be involved with that. It just seems like they don't understand and see the benefits that they could get out of my business. Anyone have any thoughts on this? Thanks.

Jon Holdman · Answer

Wholesalers and RE agents are essentially doing the same job. Both are connecting buyers and sellers and taking a cut of the deal. The mechanics are different, but that's at least partly driven by the need for wholesalers to avoid being an "unlicensed broker". So, many agents will see you as direct competition. Some will tell you what you're doing is unlicensed brokering and its illegal.

Jon Frame · Answer

I have done about 90% of my deals, about 40 now, through one Realtor and she loves me and wholesaling. You just have to find the right one who is hungry and willing to work with you. You make the Realtor part of your team and take care of them. If you have done deals with other Realtor's successfully , make sure the new Realtor is aware of that. They just might not want to work with a newbie. There is nothing shady, no murky waters, or anything wrong with assigning contracts, they are 1000% perfectly legal. I am studying for my RE License now and assigning contracts are mentioned often in the course. Although assigning bank owned is a little trickier and I'm assuming you are looking at actually doing double closes. Anyway, Jon, as much as I read a lot of your comments and learn from some of the things you post I have to disagree with you at least in my case. Actually I'm a little offended and I know you didn't mean it and I won't take it personally. :wink: I put together an entire package for my buyers. I get a contractor with a rehab estimate, I set up closing date with the title company and arrange a property manager to take over right after settlement. We will even manage the rehab by keeping tabs and taking pictures if need be. Not to mention the fact that we take all risk of the contract, deposit and reputation if we can't find a buyer. Sorry, just wanted to vent a little. Thanks.....All is good..... :D

Eddie Ziv · Answer

Many realtors who work directly with banks as REO agents, get a flat commission. It doesn't matter of the house sells for a dollar or a hundreds of thousands of them. The agent gets the same per unit. Those realtor who understand the role of wholesalers should embrace them, because they can moves those REOs fast and the agents get their fee faster and with less work.

Abraham Gros · Answer

Jon, i dont understand if you put a clause in the contract you can default the contract legaly what is the problem?

Jon Frame · Answer

As I said, assigning contracts is 100% legal. The only grey area would be if you are knowingly entering in a contract where you know that you would be defaulting on it if you can't find a buyer. If your Realtor knows that as well, that could be a problem. Basically, if you can't find a buyer YOU are responsible for closing on the deal. The seller could sue you if you default. I have not seen this happen personally but I know they can. The worst that usually happens is that you lose your deposit. But think about it, you just tied up someone's property under contract for a month or 2 , taking it off the market when they could have sold it to someone else. If a wholesaler makes a habit out of that it will surely kill your reputation. If you have any doubts about finding a buyer, you are better off getting the property under a flex option contract, that way the seller can continue to market the property and you can too as well.

Jamie Dzierwa · Answer

Interesting topics going on here. Can anyone answer this for me.. I was talking to a realtor yesterday and I simply asked him about wholesaling and assignments and what not because he has a few investors he works with that does this, and he got onto the topic that you have to be very careful with wholesaling there is a lot of investors that go into a very grey area to where it is illegal and they either don't understand that what they are doing wrong or they do they just don't care because they are making a lot of money. He said the investor could get in serious trouble and the realtor could loose their license. I didn't really go into much detail or question because I didn't want to sound like a complete idiot, but I don't understand what wholesalers can do so wrong that could make it potentially illegal or have their realtor loose their license, etc. I tend to stick to straight assignment of contract but also do the double closings. What can go on or happen with doing these deals that make it illegal? I'm hoping maybe some of you old timer investors can chime in and maybe know what this realtor is taking about Thanks for all your help and comments! Greatly appreciated!.

Jon Frame · Answer

Ok....your right .......you win......... :wink:

Jorge Caicedo · Answer

Maybe I should clarify-You asked what aRealtor has to do w/ a good deal..they don't but so many people swear by them...my buyers didn't want to go that route b/c of the commision they'd have to pay...I don't know how they are in Pa, but in N.O it's a bit of a different beast...take it from someone who was in the trenches.....

Jorge Caicedo · Answer

Jon, you don't know NOLA RE investors..lol

Jon Frame · Answer

WHY ????? What does a Realtor have to do with a good deal. You still make an offer for the price that YOU want to get. A deal is a is a deal is a deal etc.....no matter where or from who you get it. If the numbers work, they work.......PERIOD ........ You are potentially missing out on hundreds if not thousands of deals out there. Everything is still negotiable.