All Forum Posts by: Nikki Harmon

@Nikki Harmon

I realize I'm late to this discussion, but did you not require an EMD from this bozo?

There are a lot of people out there claiming to be a lot of things. It's unfortunate that the result is a generalized profile or all wholesalers. A wholesaler should be required, and willing, to post an EMD, and that EMD should be significant enough to make it painful for them to not provide a closing for the deal.

That same wholesaler, will likely require a $5k - $10k non-refundable deposit from their end buyer to protect themselves from non-performance.  Sellers should expect nothing less.

@Nikki Harmon

I realize I'm late to this discussion, but did you not require an EMD from this bozo?

There are a lot of people out there claiming to be a lot of things. It's unfortunate that the result is a generalized profile or all wholesalers. A wholesaler should be required, and willing, to post an EMD, and that EMD should be significant enough to make it painful for them to not provide a closing for the deal.

That same wholesaler, will likely require a $5k - $10k non-refundable deposit from their end buyer to protect themselves from non-performance.  Sellers should expect nothing less.

As I've learned, we are always buyers and sellers of real estate. No seller ever wants to tie up their property to someone that can't close. It's a good way to make a bad name for yourself and really irritate the other party.

What I do think is acceptable, though, is attempting to negotiate the deal so that is does work for everybody. This may not always be possible, especially if there are too many cooks in the kitchen. 

Expect people to routinely use inspection periods to pull out as well as renegotiate. That's pretty standard across the board. 

Are you talking a few grand less, which may cut into the wholesalers fee? This depends as some deals can afford the wholesaler $20K+ in profit so a few grand(i.e.$3500 to $6,000 haggle figures) less shouldn't be an issue and the wholesaler should just eat that in their fees. I would - $14K is better than nothing. Though, imo, if cash-buyers are offering substantially less, then the wholesaler's numbers are inaccurate, be it from greed or just miscalculations. 

Kudos,

Mary

 So you are saying what makes this illegal is the buyers intention of whether he was the end buyer or not? How in the world can you prove what someone's intentions were when they made the contract? Laws and legalities are not based on intentions, but acts. The severity of the punishment may be determined on intention, but not the legality of the act itself. That is what contracts are for. To show what both parties agreed to in writing. The contract had an assignment clause which tells me he had the legal right to assign the contract. Is it legal to have an assignment clause in florida?

@Nikki Harmon  Someone above said to put the $20,000 into the property yourself and sell for retail. I agree completely.  If you do not have the $20,000, but have equity, borrow the money against the home. I have done this before. I call this a "reverse flip"...it's when the home is flipped, with the owner still owning the home!

Private money lenders like myself, love this kind of a deal, because the risk is so low.  If the home is owned free and clear and you need $20,000, the risk to me placing a $20,000 1st mortgage is very low.  I don't loan in your State, but I am sure there are many private money investors who would want that deal. :-)

@Nikki Harmon  put the 20k into the home and then sell for full retail. my experince with teh buying public mirrors Mark's   when there is work to be done what a retail buyer and you will think about the costs of repairs is usually way different your thinking 20k they are@Mark Ferguson

thinking 40k and will offer accordingly   the buyers buy and large are not versed in remodel and updating and usually don't have access to subs that most fix and flip folks do so their costs are far greater.. 

Brent, if she sells at full arv minus repairs that is not a discount. If ARV is 300k and the home needs 30k in repairs she is asking if some one would pay 270k. I am not saying everyone will want a 20 percent discount, but I think 99.9 percent of people will not pay 270k on a house that needs 30k in work to get to 300k value when they could just buy an already repaired 300k house and not worry about repairs. That's not a discount at all.

For one an owner occupied buyer may not be able to get a loan depending on how severe the repairs are. The OP also wants a quick cash sale which an owner occupied buyer is unlikely to be able to do. 

Second if a house needs 30k in repairs the buyers probabaly can't finance that and will have to come up with 30k in cash and possibly wait for repairs to be done before they move in or have them done while they live there. I've been an agent and investor for almost 15 years and almost all owner occupant buyers don't want houses they had to fix. The ones that want fixer uppers are savvy buyers who can do the work themselves and want to get a smoking deal. 

About the only time the ARV minus repairs might fly is in a crazy sellers market where their are simply no homes for sale and that is the buyers only choice.

@Wayne Brooks I don't blame you I wouldn't accept any kind of buyer who wants to close on a residential home in 90 days, 30 days maybe. I don't know of any wholesalers who would try to get a contract on a house for 90 days. Most wholesalers attempt 30 days or less with advertisements that say quick closing. So, it looks like you don't work with wholesalers at all based upon what you said ? Most wholesalers will offer you a wholesale price what most of you realtors call "low ball". 

The bottom line is the seller got educated after she signed a contract with the wholesaler and continued to work with him for the several days after she fully understood what he was doing including letting his potential buyers view the property. The majority of wholesalers I know operate in this same fashion and the seller will find this out when she gets in the game. Only thing I have a problem with is that he may have not been polished enough to know his numbers and repair costs along with the prices other investors are willing to pay in certain locations.  So he wasn't able to sell the house in the end of 7 days, hopefully some earnest money was collected to compensate for those 7 days ? If not then make sure next time around.

The other fact is realtor's buyers have option periods and in Texas you pay an option fee for this but it can be waived or negotiated by the seller / buyer if they don't like it. Also realtor's buyers mostly come with bank financing that takes 30 days or longer which that can fall through at the end and repeat itself with another buyer if you are really unlucky. I know you seen this happen and happens quite often.

Therefore, lets not make wholesaling seem fraudulent and pretend that working with a realtor / broker is better or faster way to sell a house. In some instances it is an advantage like the market we are in Texas not sure about Florida. It still depends on the condition of the property and price.

Most realtors I know like to tie up a listing for 6 months are more, is that right ? Watch out for that if this seller decides to go with a realtor / broker.

One good advice that I saw was someone said that if she was willing to sell at a heavily discounted price then she should be able to do it herself if the price is right.

Don't do it through a realtor unless you negotiate their listing fee but you still have to come off that 3% for the buyers agent fee so you will be out of 5% or more. Since your dad is realtor he can do it for free. Isn't that what most of us do for our kids..LOL. Here in Texas we have what you call discounted realtors were you pay a fee up front light $500 - $700 & you pay the 3% to the buyers agent.

You can also call the wholesaler back and ask him why none of his buyers was interested in buying the property. If you get this information this may help you sell it faster if you can eliminate the obstacle.