RE Wholerssalers prices

5 Replies

Hi All,

I have a question that I hope someone can help me with.  I have been looking at wholesaler property listings that were sent to me from the summer time.  The prices that many of the properties actually sold for was between $10,000 - 20,000 less than the wholesalers had them advertised for.  I am really confused.  Can someone please explain to me how the properties sell for less than what the wholesalers advertise them for?

Thanks in advance!

Wholesalers screw up!?!?!

Look up "distressed value" here on BP, that may shed light on things like market value (which you might look up the definition of on a n appraisal site).

My guess, the wholesaler advertised to make a killing, had no idea what they were doing and ended up taking much less. Just like most everyone has at one time or another. :)

Good luck :) 

There are a number of possible explanations:

padded their listings that they sent out and accepted a smaller cut 

the deal involving the wholesaler fell through and a back-up offer was accepted

the got funding and bought themselves, so there isn't any wholesaler fee

major repairs caused a renegotiation before closing

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Originally posted by @Lisa Mauritis :

Hi All,

I have a question that I hope someone can help me with.  I have been looking at wholesaler property listings that were sent to me from the summer time.  The prices that many of the properties actually sold for was between $10,000 - 20,000 less than the wholesalers had them advertised for.  I am really confused.  Can someone please explain to me how the properties sell for less than what the wholesalers advertise them for?

Thanks in advance!

 There could be a number of reasons:

1.  The wholesaler had it in contract for $30k less then what they advertised it, so they took a lower offer but still made money.

2.  The wholesaler wasn't able to close and the seller chose another offer at a lower price.

Here's the most likely scenario:  The wholesaler got a property under contract for $100K.  They then add a $10k wholesale "fee", and market it for $110K.  Assume an end-buyer agrees to the full $110K price advertised by the wholesaler, and ultimately closes on the house.  However, the house price was never really $110K.  It was $100K with a $10K wholesale FEE, and that's how it will be listed in the closing paperwork and tax records (i.e. that the house sold for $100K).  So when you look it up later, you will only see the $100K sales price.

(Other scenarios could include that the wholesaler dropped their asking price from their initial advertised price, or whoever marketed it to you was just trying to pass along some other wholesaler's deal as their own and add their own mark-up on top of it.  But the first scenario is the most likely.)