3 Ways Wholesalers Can Protect Their Sellers (& Build Good Reputations!)

by | BiggerPockets.com

When I first started wholesaling, I remember how nerve wracking it was to get my first few contracts. I would have trouble sleeping at night, and I would worry about the contract all hours of the day until it finally cleared the closing table and I could breathe out a sigh of relief. The reason for this is I took my contracts very seriously. Oftentimes these sellers you are working with are not in the best situation and relying on you to perform. And that leads me to the topic of today’s blog post, written specifically for those of you who want to wholesale real estate in some capacity. Your success in this niche industry depends on how well you treat your sellers.

Chris Feltus

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Bad Apples in Every Bunch

I think in general there are many good wholesalers who share the mentality of taking care of the sellers. But there are a few bad apples out there, just as there are in any industry, who will over-promise, lie, cheat, and do just about anything they can think of to lock a house up and couldn’t care less about what happens to the sellers. And oftentimes it’s me who has to come in after them to clean up the mess they left behind — only now the seller is much less trusting, worried and stressed out that their house didn’t sell.south dallas real estatefort worth real estate

Related: The Top 6 Ways Wholesalers NEED to Change How They Do Business (According to a Wholesaler)

There are wholesalers out there who are indifferent as to whether they perform on the contract or not, and it’s more common than you might think. “Oh well, didn’t get this one. Better exercise my option.” And it’s usually somebody like me who has to come in behind them and try to clean up the mess they left behind. Despite your best efforts and intentions, you might find yourself in a situation where you are unable to move a contract. In that sort of scenario, it is perfectly acceptable and legal to exercise your option. However, the point is some wholesalers do not care about their end sellers at all and will throw as many contracts to the wall as possible just to see what sticks without regard to the sellers who are counting on them.

If you want to know how to get started in this business on the right foot by taking care of your sellers, the ones trusting and relying on you to get this thing done, here is what I would recommend.

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3 Ways Wholesalers Can Protect Their Sellers

Price it Right

Get the price right. More than half the battle is pricing the ARV correctly — if you do that along with a ballpark repair estimate and find the right buyer, it should move. If you overestimate or intentionally overprice it, you run the risk of running into a situation where you have no wiggle room to mark down the contract to the right price to sell it. I am always conservative with my ARVs and tend to estimate on the lower end of the spectrum that the comps are reporting.

Verify Your Buyers

As a wholesaler, you are not representing the sellers, but you still want to take care of them and ensure a deal seamless as possible. The other half of the puzzle is cultivating buyers that you can trust. This only comes through experience and doing deals together several times. But you want to get to the point where once you assign over a contract, you can just put that on the back burner in your mind because your buyer will take care of it.

Related: 5 Reasons Your Biggest Competition is Actually Your Best Ally as a Wholesaler

If it is someone newer that you have not done business with yet, I would recommend that you verify your buyer’s funds. If they tell you they are paying in cash, ask for a bank statement. If they tell you they will be using a loan such as hard money, give their lender a call. It doesn’t have to be unpleasant; just ask them, “Hey, you know _____, right? Is he guaranteed for these funds and good to go?” That’s all it takes. It’s not a painful phone call to make, and it can save you a lot of trouble sometimes.


Don’t Try to Make a Killing on Every Deal

Don’t expect to hit a home run on every contract you get in terms of your assignment fee. This is a problem for many newer wholesalers who get lucky and hit a few big ones out of the park. Many times they go forward now expecting to milk every contract for as much as they think they can get out of it, even if the numbers don’t make sense and support it. Instead, I would rather new wholesalers have the interim goal of consistently closing on 2-3 houses a month with a modest assignment fee. If an opportunity presents itself where you can make more, go ahead, but don’t try and force outrageous assignment fees on every deal. Doing so can really screw the sellers and result in a contract that never makes it past the closing table.

Take these steps to heart, and you will be well on your way. Your success depends on your sellers’ level of success, so take care of them.

Wholesalers: What would you add to this list?

Leave a comment, and let me know!

About Author

Chris Feltus

Chris is an active real estate investor who buys and flips houses in the Dallas real estate market. He enjoys helping others along on their journey. In addition, Chris operates as a licensed Realtor in the Dallas-Fort Worth area.


  1. Andrew Syrios

    Good post! Taking care of your end buyers is critical! I’ve especially seen this with turnkey properties (which would be a great follow up post). The one’s that don’t provide good properties are always looking for new clients. Best to just do it right the first time and build a list of long term buyers.

    • Chris Feltus

      Thanks Andrew – Yes you are exactly right. And you read my mind I was thinking about doing one for end buyers as a follow up post. We have a few companies in our area that provide turn key properties – and their clients are like a revolving door, they don’t care what there buyers pick up they just pressure them into pulling the trigger. There reputation is pretty abysmal and its starting to catch up with them. I never understood that mentality – its way better to take care of your client, build a relationship, and not only will you feel good inside because you treated them right and didn’t take advantage of them but they will also come back for repeat business. Its a win win.

  2. Jay Johnson

    Hey Chris,

    I haven’t done my first deal yet, but every time I know I’m going to talk to a seller for the second time, I get that I can’t sleep feeling the night before. Today, I, actually, have a seller at the right price that may let me assign my contract. They just want out after back surgery because they can’t take care of it anymore while living somewhere else. He is on a bunch of medication, and I don’t won’t a “legal competent parties” issue to come up later, though. The funny thing is that the further I get along in dealing with a seller, that looks like it may turn into a deal being done, the less nervous I get.

  3. Jeanne Batza

    Thanks for a thoughtful, well-articulated post. Maybe you can answer my burning question about wholesaling contracts: how does the wholesaler write the contract with the option to cancel if a buyer isn’t found? I am not a wholesaler but I’m on a wholesaler’s buyers list and am curious how the wholesaler can successfully opt out. Thanks! Jeanne

  4. Darnell Griggs

    Thanks for sharing. Starting wholesaling and want to do it the right way. While the money may be nice, you want the buyer and the seller to be happy and feel confident about the actual process without feeling like something is or could go wrong.

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