Is transparency a good strategy?

Question

Hi friends,

When making contact with a seller, is it a better strategy to allow them to think I am the investor or is being upfront about what I do as a wholesaler the better route?

Michael Quarles · Answer

I think the answer is in the question to yourself.  If you reversed roles would you expect or want to know.  If so there's your answer.

I think honesty is a great resource.

Brooks Conkle · Answer

Michael and Andrew gave great answers.
Will you lose some deals by being completely transparent? Probably.
Is that a bad thing?  
No.
But do I also think that you can confuse parties (both sellers and buyers) by explaining too much to them?
Yes.

Best of luck to you Sir!

Scott Costello · Answer

I always prefer to be transparent if asked a specific question.  Otherwise I just give as much information as is needed for the situation.   To much information can create confusion which will immediately turn the sellers off and cause them to walk away.

Henry M. · Answer

Wesley,

Honesty is the best policy, however being too transparent can backfire.

It truly depends on your approach. If your intentions are to flip/wholesale/assign/whatever let the seller know you have many buyers (investors) seeking similar homes like his.

If you are not the buyer and trying to pass yourself off as the buyer, it can get hairy pretty quick.

The only time deals close quickly is when you are dealing in CA$H otherwise, it takes time... Depending on your area 30-45 days (traditional funding), maybe longer.

Avg. 2-4 weeks anything else outside of those two mentioned above.

You need a good team around you and it only takes one to mess up or throw a wrench in it.

Keep that in mind.

Big Henry

Wesly Peterson · Answer

Thanks everybody, really good insight shared here.

Andrew Massaro · Answer

Go with your gut feeling, Wesly.  If your gut says to be honest, then do it.  Test it out and see if it turns any sellers off.  I am not one of those that thinks you have to be transparent, or that it's better.  I didn't test it, but I often thought it could hurt my ability to get the contract.  I feel like sellers want to deal with buyers... not middlemen.  And, as far as they knew, I am the buyer but just decided to bring in a partner on the deal.

The only time I was honest is when the deal was iffy, like it was a bit of a reach for me.  In this case, I would explain that I won't be buying the house, myself, but would gladly shop the house to my many cash buyer.  And then I would present a flex option contract.

Wesly Peterson · Answer

Excellent, I was hoping to build my reputation on transparency. I was more or less just curious if, in an industry like this, it was feasible to prosper as a wholesaler using this method.

Is transparency a good strategy?

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