Wholesaler backing out of purchase

[Megan Brooks]

Hi,

A wholesaler reached out to a land listing I had on Craigslist and made me an offer and we signed a contract. He’s now saying he can’t purchase the land because it doesn’t make financial sense and he doesn’t have an end buyer. Shouldn’t he have done this research prior to making me an offer? Do I have any chance in this sale going through? He told me if he could not find a buyer he would purchase it. Any advice?

Thanks!

[Don Konipol]

@Megan Brooks

Accepting a contract offer from MOST wholesale wannabes is the same as giving them an option to buy your property with no option fee, except that you don’t know it and think you have a solid contract.

When dealing with a wholesaler I will insist that they do their due diligence upfront and pay a non refundable EMD or relatively significant option fee. Most wont do this because they don't have any specific buyers; they aren't knowledgeable enough to have confidence in their own ability to analyze the property; they have no money; and or their not really committed to their "business".

If I want someone to “try” to sell my property I can list it with a real estate broker where I’ll be able to obtain the highest market price at the time and have it exposed on a national basis through all the major online platforms. Unless I have a property that real estate brokers are uninterested or unable to market, I just don’t see why I’d want to tie it up with a third party where I have no input into the marketing of the property and where I’m at the mercy of an unlicensed individual with no accountability for his actions.

I’ve got to believe that most sellers who sell to most wholesalers don’t really understand that they do not have a solid deal, and that the wholesaler will use the due diligence period not for studying the normal property possible deficiencies but to see if he can flip the contract to another buyer at an increased price and then terminate the contract if he can’t.