Quote from
@Kelly Asmus:
I'm a full-time broker and I also work with wholesalers. The wholesalers I work with only put properties under contract that are NOT on the mls. They find the properties on their own by knocking on doors/mailers/bird dogging/etc, put them under contract and then offer the properties to agents like myself, and others, who have potential investor/flipper buyers for these properties.
This transaction works well since the property is not advertised on the MLS and the whole situation is above board and all parties understand it. I then bring my buyer client into the deal and they purchase the property. Whatever the purchase price is that is negotiated, the commission for my services is added on top of that. All parties understand this. The buyer is getting a property that isn't on MLS, isn't advertised, isn't in a bidding war, etc. All parties are happy.
I, and most other agents, won't write low ball offers for properties on the MLS, tie them up and waste the sellers time and the listing agents' time. This is not ethical since you have no intention of really closing. It also gives me a bad reputation in the real estate community if I'm constantly sending low ball offers that won't close - eventually you will get a bad rep and other agents won't work with you - or just disregard your offers as worthless. My reputation is important.
Wholesaling can work as long as it is done ethically and all parties are privy.
Hi Kelly,
I understand your points, and I very much appreciate you taking the time to reply so thoroughly. I certainly do not want a bad reputation. I always want to do things transparently and ethically. Wholesaling can be done ethically with on-market listings, though. And if an offer is made in good faith, a realtor is obligated to bring that offer to their client. Not doing so would be unethical. The only situation where a realtor would have the discretion to reject an offer out of hand without bringing it to their client is possibly if the seller set a floor price for offers, and if the offer in question was below that floor price.
Additionally, if I as a real estate investor (which I am) submit a contract, either myself, one of my real estate partners or another yet to be named individual/entity intends to close on the property. I cannot speak for others who may truly have zero intention of closing, so generally speaking, I understand your point about that.
But overall, my point is that wholesalers fulfill a need in the real estate space and when they operate in good faith, ethically and with transparency, there is no reason why they should be dismissed.
