I recently had a seller come to me and say that during the process of deciding whether or not to put their house on the market, they entertained one of those Bandit signs. A wholeseller came over and told them their house was worth 90k less than what I told them it was worth when i previously visited them. Armed with this information they went nuts on the guy for lying to them. Subsequent appraisal afterwords confirmed my original CMA was correct. My question is how could this have been avoided if you are that wholeseller looking to make money.
retail resale versus.. wholesale.
Interesting situation @Rod Desinord . Not all wholesalers operate in the same manner, so it is kind of tricky. A big part of wholesaling is obviously picking up properties for less than what they are worth. The benefit to the seller is that they are able to liquidate a property quickly to a cash buyer. If the seller isn't distressed and doesn't need a quick cash offer they will be offended by lowball offers from wholesalers, especially if the wholesaler isn't tactful in their approach. When I'm negotiating a wholesale deal, I just tell people what I can afford to pay, rather than go into bashing the property and telling them they will never be able to sell for more. Best of luck in your situation!
@Jeff Joachim :
Good point that guy should have found out what their motives for selling was besides coming in low balling first
Well, of course they low balled her. Wholesalers generally need a degree of ignorance and/or desperation on the part of the seller to get it at a price they need.
I'm always upfront and honest. I tell the seller what the house is worth fully repaired (ARV) then let them know approximately how much it would take in repairs to get to that condition. Then tell explain holding costs to them and explain that, as a business, there is going to be a profit margin built into all that. Then I give them my offer. If they take it, great. If it's too low for them and the house is in relatively good shape I refer them to one of the realtors I work with. If the house is not in great shape I put them on followup.
I am typically all for supporting anyone who is hard working but when wholesalers try to convince a seller their house is worth $90K less than what is it really worth then I am all for lynching them in public and exposing them for the cons that they are. I would find out who they were and prosecute them to the full extent of the law if at all possible.
@Rod Desinord , treating people badly as a wholesaler is no different than real estate agents talking a high listing price to get the listing and then slowly decreasing the price to where it should be. There are unethical people in every line of work.
While I usually agree with @Jay Hinrichs comments, I do not agree with his comments in this post as there are laws in many states that take a dim view of taking advantage of people unwittingly. With all the regulation in place. it is easy to find yourself on the wrong side of a judge.
And lastly, I think @Jim Viens has the best answer as your reputation will get you more deals over a lifetime than a lying snake will ever get in today's market.
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