Wholesaling an Expired MLS Listing

[Dylan Barnard]

Good morning Bigger Pockets!

So we are still quite new to wholesaling, and we have a story for you guys from this week. A few weeks back, we sent out mailers to around 800 expired MLS listings offering to either buy their house in cash or try my wife, Melissa, as an agent and see if we can get better results for their listing.

Well on Tuesday night, Melissa received a text on her personal number from a seller with a picture of our mailer, and much to our surprise, a digit was left off of the end of our business phone number... Our initial reaction was "crap, we just wasted like $500 on these mailers", but then we started thinking, "hey, this guy must be motivated if he looked Melissa up online and got her personal number to text instead of our business line." 

So we started a dialogue with the seller and found out he is in a time crunch and needs to get cash so he can have a down payment for another house that he is now finished building. He has to be out of the property by February 15th, so we think, alright, we can really help this guy out and make some money at the same time. The house is a 2014 build, in excellent condition, and is in a pretty good location, by Alliance Town Center in Fort Worth. We start looking through the previous listing, and he had it listed for $333k for about a month, then dropped it to $310k for about a month before taking it off the market. The property still had an active listing, but it was only for rent. Melissa runs the comps and she thinks it's worth about $312k.

Next step, we need to find out a way to get his current agent out of the equation. Melissa ends up calling the agent to discuss how we sent out a mailer on an expired listing, how his client called us because he is very motivated to sell the property, and how we really want to help out her client, but we need him to terminate the rental listing before we move forward with his client. Well, naturally, he did not like that at all. He proceeded to yell at Melissa for a good 15 - 20 minutes about how she is "stepping on his toes" and "how dare she go around him to his seller without talking to him" and about how he's gonna report her to TREC or something like that, but then she explained how we just sent out a mailer on an expired listing and only had her client's best interests in mind, there was no active listing for sale, etc.

Keep in mind, we are both still pretty new to the business, so please leave some advice in the comments on what we could have done better. We realize we might not have handled this the best way. But anyways, we proceed to offer $265k for the property and the seller ends up liking that offer and wants to take it. He also tells us that he respects the fact that we had an offer for him within 24 hours, and that he would really like to sell to us. We think, great, let's do it. All he needs to do is terminate any contract he still has with his agent and we can get this deal done quickly, like he needs. 

So a day goes by and he comes back to say that he talked to his agent and he miraculously found a buyer within 24 hours at $275k and wants us to match that offer. He was being pretty shady about it too, saying he wants us to offer $280, but then he will actually accept $275, just so he can get the agent off of his back I think. We told him the previous offer was firm and at that point, and from the conversation before with the agent, we just didn't have the best feeling about what was going on and we didn't think it was worth the potential trouble that it could turn into, and we decide to walk away. There are hopefully plenty of more deals that can go a lot smoother than this one..

What do you guys think? Did we do something wrong or what could we have done better to have made this one work out? At the end of the day, we just want to do right by people, but agents make that really difficult sometimes. We'd love to hear your thoughts in the comments!

[Lydia R.]

@Dylan Barnard I think that of all the niches to start with for wholesaling expired MLS listings isnt where I would start. I totally understand that your wife could re-list the property if the seller wasnt motivated enough to sell at a wholesale price, but here is the thing. In this market, the biggest reason that properties dont sell on the MLS is that they are over priced and the seller is not motivated (or financially able) to come down far enough from their list price.

There are tons of other lead sources that will give you more motivated sellers and since your wife is licensed she would have the option of listing properties you find where the owner wants more of a retail price.

Hope this helps! PM me if you have questions!