@Franky Aikens
That's a very Quoraesk question. Do you indulge in Quora?
There's no good place to start. What ever I may mention will likely draw the ire of those on this board who have a shoot em on site opinion towards wholesalers. Not too many people seem to have a beef with wholesaling done properly. The consensus on properly centers on intent.
Even the stoutest agent (I believe) has no problem with individuals seeking to buy their own properties off market. No one is obligated to pay the asking retail price. All retail sales are subject to negotiation with the Listing Agent required to transmit all offers. Any seller can instruct their Agent to accept any offer even if the Agent disagrees.
In a retail transaction, the seller at the least has the assumption of a Trained legal expert to give them their opinion, but is not obligated to accept it. Agents are obligated to disclose their license to anyone they negotiate with as a protection to laymen....who can still negotiate as they will, they've been clued that they are dealing with an expert.
A real estate sale can happen between two laymen, two experts, or any combination of the two across the the spectrum. If I, John Q. Public want to make an offer on a house that is not listed, and I can call or otherwise reach out to the owner of the house I want to buy and make my offer known. If it's accepted, we can write and execute a contract. If either of us default, the contract should contain remedies.
Wholesaling can also happen between any combination of parties. As long as my intent is to buy, they I can turn right around and resell. If the contract is assignable, I can change how I choose to vest. Or I could assign it to a partner, associate or whomever else I please as long as it closes.
Many Investors, licensed or not, whether they flip or hold do this frequently and I doubt that many have a problem with it. In this case, wholesaling is an exit strategy. The operator is not a wholesaler per se, he is one who sold his position via wholesale rather than flipping or holding. One way or another, this property was going to close according to the contract.
A wholesaler on the other hand, is someone who makes a business of doing this. The sole intention is to contract the property with no intention to close. If no buyer is found for the contract, he walks away. That's problematic for a number of reasons, legal and otherwise. When all goes well things are good. 10 years ago, Investors enjoyed working with good wholesalers who would actively scout the properties desired and do all of the leg work.
Over time, the ability to get involved with little or no skin in the game, the ability to make a lump sum of money quickly, and a plethora of bad information made available by people who were only after the disposable income of those who really did not have enough money to get involved in higher level RE took a good tool and exploited it.
Wholesalers exploiting undereducated layman (someone who does this exclusively for a living is operating as an Agent with no licensing issues to restrain them or cause them to disclose expert status), using a lot of really distasteful tactics (like trying to wholesale deals already on the MLS, co wholesaling through a string of folks) and getting greedier and greedier as they went....That's where the stink came from.
The need for regulation and outcry from professionals heard loud and clear.
In my opinion, the biggest problem that needs to be solved it the ability to have an open discussion in place like this that don't turn into long anti wholesale threads populated with very closed minded people one upping their good ole boy club. One without stereotyping, all of nothing language and an acknowledgement that wholesaling as a tool has a place in the Investor kit.
That's my opinion, but tends to get drowned out by people with way too much time on their hands for typing.
Hope that helps.
