Best Practices for Wholesalers Working With Agents?

[Ali Makani]

Hey RE agents, I'm a new wholesaler who is trying to build long term relationships with realtors (and of course compensate them well for their efforts), but I want to avoid the pitfalls that others have in terms of outreach and poor behavior. 

As agents, what are some green flags you look for when dealing with a wholesaler that makes you feel comfortable doing repeat business with them? Conversely, what are some red flags that make you stay away?

Thanks everyone!

[Bruce Lynn]

Ali,

I'm going to say something you don't want to hear, but agents for the most part don't work with wholesalers.  Obviously there are exceptions, but there are a lot of reasons for this.  Only about 20% of the wholesale deals that reach title actually close.  We really can't waste our time on that and put our buyer's or seller at high risk for not closing.  You have to think why you can get the deals you do.  They're often the ones realtors can't or won't touch, so you get to market them.  Our reputation is at risk if they don't close and our buyer/seller loses any time or money.

Most wholesalers are criminal and just create horrible numbers. Obviously there are exceptions...but was in a REIA meeting last week with about 80% of the room that were wholesalers. Out of 150 people, I'll bet there were 3 or 4 that are legit and know their craft well. Some straight up telling people how long they were in prison or how many times they've gone to jail. I mean I knew that already, but there it was right up in front of your face. I left thinking how many people I would never do business with. Can't afford to risk my license or reputation working with people with bad reputations.

Remember we are listing specialists....For the most part we put property ON the market and sell it ON the market. Even if it is ugly, beat up, purple, pink, or missing all the windows. There are plenty of investors that buy off MLS and get great deals there and don't work with wholesalers. If you think we're going to feed you our inventory, I think very little of that happens. Obviously by now many wholesalers are just fuming at these words. Maybe they're the exception that move property. I probably get 50 calls a week from wholesalers wanting to offer on my off market properties. We're just not going to take that risk.

If you want to build a long term relationship with realtors, get some cash.  CLOSE on every single property you put under contract.  EVERY one.  Don't retrade.  YOU take the risk.  NEVER back out of a contract or fail to close.   It's not risk free to you.  The first time you mess up a deal, lie to a seller, lie to a realtor, and think you just walk away scott free, the ones that give you a chance won't give you a second one.  Sometimes you will screw it up.  That's your university level education.  You figure out a way to make it work, make it close, even if you take a bath on the finances.  Otherwise you're just one of the 50 that called me this week and one of the 48 that never closed a deal.

Have a list of all the deals you close.  Names, addresses, prices, dates, maybe before and after pictures.   Provide that as proof of a closer and not just a wholesaler.

There are much better lead sources than realtors.  They probably should be last on your list.  Call the divorces, the probates, the preforeclosures, the vacant houses, the code enforcement list, the demo list, the no water meter list,  and every other list you can find.  You'll find more success there than with realtors I expect.

Good luck and best wishes and go getum tiger.