Wholesaling

11 Replies

I need a little advice but more importantly need to be advised.

I spoke with a seller of a MU property over the phone. They would like to sell the property as they are no longer capable of managing the property. I negotiated a price but they aren't comfortable signing a contract. They are aware that I am wholesaling this deal and they respect my strategy. What is a good way to secure this deal under contract, before I market the deal? I have assured the seller that they can continue to market their property as I will market the deal.  I am new to investing so any advice is greatly appreciated.

Thank You,

Kevin and Amy

(484) 369-0303

You could back into it. If you have a buyer already you can sign a notarized fee agreement with your buyer however that only secures your fee.

What's their reservation? Do they think they can get more money? If they want to sell the property they will eventually have to sign a contract with someone.

That does make a lot of sense. But your right, that still doesn't secure the offer agreement @Michael G.

(484) 369-0303

I don't think they can get more money. But I do think he's hesitant about me being a wholesaler. I was clear of exactly how the wholesale process works and he agreed that I should receive a fee for the contract. But then when I said I would send over an agreement, he started to get cold feet. Should I just try again from a different angle of coach them through it? @Lucas P.

(484) 369-0303

@Amy Fowler Oh, so you are not seeing him face to face? You should have someone on the ground that can look at the property and have a contract ready to go if you agree on a price. It's difficult on the phone and that's probably his reservation. Not saying it can't be done, but people can get all funny and emotional when faced with making big decisions and if you give him time, he will change his mind.

Honestly, I leave the "I'm a wholesaler" out of the conversation and mention that you represent a number of investors that are looking for homes in the area. It's not a lie, it's what you are doing and they really don't need to know about any fees coming to you. It just confuses the seller.

Not to mention, @Amy Fowler , that negotiating a fee with your buyer can be misconstrued as a realtor fee and that is illegal in most, if not all states.

You cannot market a property in which you have no equitable interest, if you are not a realtor. 

I agree with @Lucas P. , I also leave the whosaler part out of the conversation. At least in the beginning. It's one thing to be honest and transparent (which of course you have to be), but it's another to jeopardize your contracts by talking the people out of it. 

Would they perhaps be open to an signing an option that defines what you will happen when you have an investor ready to buy? If you cannot get the exclusive option, would they be willing to sign an option that allows them to continue to find a buyer while you are looking as well? It would seem very unlikely that they would look too hard for a buyer if they were willing to use you. Sort of a soft close.

I normally don't say anything but he asked. I'll look to be more transparent in the future.

So another question...They agreed that if I have a buy ready then they will sign all the paperwork to do the deal. Is it even smart/worth it to pursue this deal even though it's not under contract in writing. Only a verbal contact.

(484) 369-0303

I'm not saying you should do this. I would prefer a contract, BUT I've marketed and wholesaled deals I only had a verbal agreement with the seller on. Actually closed one today. 

People assume a lot, if you've got the nuts to send a deal out they assume you have it under contract. 

Lets put it this way, a contract is better. But if you cannot get one, marketing a deal without a contract is better than not marketing a deal. 

Other way is a flex option, gives the seller flexibility but should you bring a buyer in at the price they are okay with you have the right to buy it. 

You could try again. Try and uncover the real objection. Mr. Seller I know you don't want to sign a purchase and sale agreement and I can understand your reluctance to sign documents because I've felt the same way in the past. (always agree with the seller). Here's the thing Mr. Seller. signing a contract keeps everyone in the transaction honest both you and I. For instance if I don't buy your house by the date on page X of the contract that means you are no longer contractually obligated to sell me the house...does that make sense? ( you want him to say yes) and you would agree Mr. Seller that it's only fair that during our transaction everything that we agree to verbally is in writing so there is no misunderstanding and we are both protected contractually correct? (You want another yes) and lastly Mr. Seller you seem like a perfectly nice fellow but without a contractual agreement there is nothing stopping you from selling the house to someone else while i am attempting to buy the house, is that correct? (You want another yes). So based on the points we just agreed on It's a good idea to sign a contract so we are both protected. Don't you agree? Great. ..I just need you signature here.

Mr. Seller could answer no or disagree with any of your questions. To which you would say. I understand. I felt the same way until I discovered...(and then you handle the objection.) For instance if he says "I wouldn't sell the house to someone else while selling it to you". You would respond Yes I feel the same way until I heard it happened to a colleague of mine. Him : But I don't do business like that...You: I'm sure you don't sir but you agree a contract would absolutely keep everyone safe if it did happen correct? (You want to get him back to a yes here)

You get the drift...

It's the art of persuasion Amy and you get better at it with practice. Worst case scenario he doesn't sign and you are in the same place you were when you started the conversation.

Originally posted by @Amy Fowler :

I need a little advice but more importantly need to be advised.

I spoke with a seller of a MU property over the phone. They would like to sell the property as they are no longer capable of managing the property. I negotiated a price but they aren't comfortable signing a contract. They are aware that I am wholesaling this deal and they respect my strategy. What is a good way to secure this deal under contract, before I market the deal? I have assured the seller that they can continue to market their property as I will market the deal.  I am new to investing so any advice is greatly appreciated.

Thank You,

Kevin and Amy

 Your contract is called a non exclusive option to purchase, seller can sell while you market for a buyer

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