Seller refusing to allow marketing to buyers

27 Replies

I had a deal that I wanted to wholesale. The one bone of contention was that the seller did not want me marketing the property for others to buy. He only wanted me to buy as he was afraid that if I didn't find buyers that I would not go through with the deal and he wanted to get rid of the property. At that time I didn't know about BP, did not have any money of my own to buy and had no buyer's list to go to.  How would you overcome that type of objection when you are dealing with a wholesale situation??

I would obtain a few quality buyers I can go to with my deals. Negotiate a set time with the seller, one-time for them to come by.  An open 'I need some buyer's to come by whenever they want for however long I need - oh after I find them' is a legitimate seller concern  I would think.  

If you find a deal, the buyers will come (they say).   Even if I didn't have a bunch of buyer's lined up, I would still just schedule a time the following week, then get some!  I would also be looking for hard money to double close if I need to.  Just remember @Jerry Stanford  , we don't leave sellers hanging.  We do what we say we are going to do and we give earnest money in good faith.  Cheers!

@Steve Vaughan He didn't know that I didn't have buyers lined up as I never mentioned that to him. He just looked at the contract and in the contract it noted that I would be marketing to buyers and they would need access to the property for inspection.  He wanted me to buy it and then after that I could do what I want to with it.  He didn't want me to back out the deal if I don't find a buyer for the property. He also didn't want a lockbox on the property.

Of course he didnt want a lockbox and multiple people tramping through his house, and no reasonabl expectation of a quick sale. If he was willing to put up with those things, he would be far (far,far,far,far) better off listing with a broker.

What is your value proposition? In other words, what are you offering that he cannot get elsewhere? It sounds like there isn't anything.

Buy the house and then sell it. If you don't have the.money for that, get a license and list it.

Oh- gotcha @Jerry Stanford .  I was thinking he flinched with uncertain info - he just flinched, period! 

In that case, I may ask the seller for an option to buy the property at a certain price for a certain amount of time or something like that. It wouldn't even have to be an exclusive option to you, just something you have on paper so you are comfortable talking to some buyers.  Perhaps some more experienced wholesalers will chime in and aid with how they overcome this objection.  It must be a common one!   

So it looks like you have a license. Just list it. Or round up the money and buy it. You are a pro member so you can post on the marketplace looking for private money.

@Steve Vaughan ...hmmm...never thought about it that way. Thank you.

@Richard C. ...This was a past deal. I wasn't a broker back then. I wish I had know about BP back then. 

Originally posted by @Jerry Stanford :

I had a deal that I wanted to wholesale. The one bone of contention was that the seller did not want me marketing the property for others to buy. He only wanted me to buy as he was afraid that if I didn't find buyers that I would not go through with the deal and he wanted to get rid of the property. At that time I didn't know about BP, did not have any money of my own to buy and had no buyer's list to go to.  How would you overcome that type of objection when you are dealing with a wholesale situation??

 And you are a real estate broker? 

Don't you need a listing to advertise a property?

Overcome the objection? Tear up the contract and make peace with the owner! Maybe he won't sue your tail off! And, you're a broker...... :(

@Bill Gulley  @Richard C...I wasn't a broker back then and the seller did not want to list the property.  Considering that I didn't have a buyer's list to go to and no money to buy the property, is there any other way or ideas of how I could have wholesaled that property to avoid the seller's objection to marketing the property to buyers??

Early on after introductions and finding why they are selling, their motivation, what they are trying to solve, ask simple questions.

Jerry, tell me, do you care who buys your house? I assure you, the answer will be no! They don't care. If anyone did (never happened to me) remind them of fair housing laws.

So, while I am interested in buying properties for my investments, if we agree to a fair price, you'll sell it at that price, is that right? Jerry says yes! Okay, great!

(Time to pay a compliment)

Jerry, overall the house looks good, from the out side the (whatever) looks (really nice, good, fair) I can see the possibilities for this being a good investment! 

(I don't care if the place is falling in, something has to be good about it or you shouldn't be there! Tell the owner something they already know as a good investment feature.

Any prudent seller will pay attention to your interest in them and in their property. Careful, show too much interest in the property and they see dollar signs! Show interest in them and they are more likely to work with you.)

Jerry, the way real estate transactions are done, is that we do a quick inspection, we (have already or will) pull(ed) up comparable sold properties and we can find a fair price that we agree on.  Is that okay with you? Jerry says sure.

After we get a standard contract signed, that's when my work really begins Jerry. By law, there are some seller's disclosures any seller needs to provide to any buyer, but as an investor I'm not as concerned about such things like a homeowner would be. But, we need to follow the laws.....right?  And Jerry says "Oh yes, it has to be legal"!

Jerry, after we agree to a fair price, that is when I really go to work. I need to do inspections, I may need to line up contractors, make material lists and other things, but I can do my part pretty quickly. At that point, you can see where I have already invested my time, efforts and money in our deal, you can understand that, right? 

Jerry says something like "well, yes, but that's  your business". You're right Jerry, it's not your fault that I'm in business......say that with a wink and nod, jokingly or with a sigh.

Jerry, a few moments ago you told me that you didn't care who bought your property so long as you get the price we agree to, that's very important to me. Here's why;

I already know this can be a good investment property, I'm interested in buying it, but until all the inspections are done I can't say that any property fits my investment needs, but I also don't want to walk away from any agreement I make. That's not the way I do business!

To give you the best price I can means my assessments must be on the money, I don't want to waste your time or mine. I will have time, effort and money invested in our contract, and the work I do, just as other investors do.

Investors actually work together, if a property is on the market and it doesn't fit what they need, they will tell other investors. It's a big advantage for everyone. 

Jerry, that means that when we reach an agreed fair price, regardless of any problems discovered, the seller saves marketing time and their holding costs are less.

For you, it's like having a stack of back up contracts at the same price, the chances of closing can be much greater dealing with investors than picky home buyers. You get your price and you don't pay any commissions.  

Investors that work together trust each other, another investor will spend less time considering an investment property if most of the work has already been done for them.

Jerry, time is money for all of us. My time, effort and money will be paid by the investors I work with, if I let them buy it, that is, if I don't buy it first as I plan on doing. 

It's an assurance that neither one of us are wasting our time and money. 

I'm sure you see the advantage of working with me, Jerry. Is that acceptable to you, to be assured of selling your property at the price you agree to? 

Done! Move on. Your position is fully disclosed. There is no smoke here, no partner lies, no weasel clauses, just the property being accepted after usual and customary inspections. 

You explained your business position. I have also told people I can't feed my dog by just looking and contracting on properties! No one works for free. (Well, except for me, LOL)

The seller agrees to what he said he would do, sell to anyone at his price! 

That also means, those other investors need to be known to you! Know your buyers, what they want, what they will do, otherwise, don't take a seller's property off the market just to go beat the bushes!!! 

Now, go and do good! :)

     

      

@Bill Gulley ...that was superb!!  You have me shaking my head yes and I'm not even a motivated seller, lol!!  Thanx for the input gentleman. I do want to show the seller value in what I do and make everything plain and simple.

Seller wanted to sell you the house. He didn't want to hire a real estate agent.

There is no overcoming the sellers objections. You should only be submitting an offer to purchase a sellers property if you intend to purchase a sellers property.

If you want to bring a buyer and a seller together while making yourself some money that is great. I do it every day and I love it. You will need to become a licensed agent and sign sellers up to listing agreements.

@James Wise ...Isn't wholesaling bringing buyers and sellers together while making yourself some money?? Wholesalers don't intend to buy the property, they only bring the property to someone who will buy it, don't they?? If you have to be a licensed agent to bring buyers and sellers together, where does the wholesaler fit in??

Originally posted by @Jerry Stanford :

@James Wise...Isn't wholesaling bringing buyers and sellers together while making yourself some money?? Wholesalers don't intend to buy the property, they only bring the property to someone who will buy it, don't they?? If you have to be a licensed agent to bring buyers and sellers together, where does the wholesaler fit in??

Read yours states laws regarding brokerage activity.

@James Wise...So far, I haven't seen anything in the laws that prohibit wholesaling. If you are a party/principal to the contract and wish to assign your right to purchase to someone else, you may do so. I will keep looking.

Illinois Compiled Statutes (ILCS)

"Broker" means an individual, partnership, limited liability company, corporation, or registered limited liability partnership other than a real estate salesperson or leasing agent who, whether in person or through any media or technology, for another and for compensation, or with the intention or expectation of receiving compensation, either directly or indirectly:
(1) Sells, exchanges, purchases, rents, or leases
real estate.
(2) Offers to sell, exchange, purchase, rent, or
lease real estate.
(3) Negotiates, offers, attempts, or agrees to
negotiate the sale, exchange, purchase, rental, or leasing of real estate.
(4) Lists, offers, attempts, or agrees to list real
estate for sale, lease, or exchange.
(5) Buys, sells, offers to buy or sell, or otherwise
deals in options on real estate or improvements thereon.
(6) Supervises the collection, offer, attempt, or
agreement to collect rent for the use of real estate.
(7) Advertises or represents himself or herself as
being engaged in the business of buying, selling, exchanging, renting, or leasing real estate.
(8) Assists or directs in procuring or referring of
leads or prospects, intended to result in the sale, exchange, lease, or rental of real estate.
(9) Assists or directs in the negotiation of any
transaction intended to result in the sale, exchange, lease, or rental of real estate.
(10) Opens real estate to the public for marketing
purposes.
(11) Sells, leases, or offers for sale or lease real
estate at auction.
(12) Prepares or provides a broker price opinion or
comparative market analysis as those terms are defined in this Act, pursuant to the provisions of Section 10-45 of this Act.


I interpret this to mean someone who is not a broker in Illinois shouldn't be trying to sell someone else's property. If you are a Broker now just sign the seller up to a listing agreement and sell away.

Wow @Bill Gulley ...I've read a LOT of your posts.  Not sure I've ever seen "script" before.  Awesome!  Good stuff.

@James Wise , I'm not a lawyer, but my interpretation of the law you just quoted has two key words "for another".  That's the gray area wholesaling operates in legally in many states.  The goal of contracting a piece of property is to gain equitable title, and eventually conveyance.  Therefore, in most states "for another" is theoretically out the window.  As long as the "buyer's intent" (in Texas anyway), is to close the deal his/herself, or by assigning to another buyer, for a profit.  I didn't see the part of the Illinois law that deals with equitable title and assignments quoted above.  It would be necessary to have those statutes as well to have a good heated discussion about it in that state. 

@James Wise ...I see where you're coming from. The situation I was referring to was when I was not a broker so I didn't have that option back then and the seller did not want to pay a commission to broker which is why he wanted to sell to me.

You cannot represent another for compensation without being licensed. If you are representing yourself, that's a different matter. If you decide to offer to purchase and it is accepted and you decide to assign that right to someone else, there's no law against it..

The Real Estate Act of 2000 notes: "Illinois courts have adopted the definition of “assignment” which is: An assignment of a right is a manifestation of the assignor’s intention to transfer it by virtue of which the assignor’s right to performance by the obligor is extinguished in whole or in part and the assignee acquires a right to such performance. If a valid assignment is effected, the assignee acquires all of the interest of the assignor in the property that is transferred. The assignee, it has been often said, is placed ‘in the shoes’ of the assignor.

Illinois law recognizes the distinction between the assignment of a right and the delegation of a duty and recognizes that an assignment can involve merely the transfer of a right. In this respect, Illinois authorities, recognize the general rule that rights under a contract are freely assignable.

As a general matter assignments are governed by contract law, and an assignment is subject to the same requisites for validity as are other contracts, such as intent, mutuality of assent, capacity to contract, legal subject matter, and consideration."

In wholesaling, you are representing yourself in the transaction and have the right to assign your right to purchase to someone else. It's who you are representing that's the key. Nothing wrong with listing the property and I don't mind doing it but many sellers do not want to just simply list with a broker because they want to avoid the commission. That's where wholesaling comes it.  There's no commission charged to the seller for contracting to sell their home to a wholesaler.

 @Jerry Stanford

Well, if we are going by the logic that intent is important for a valid assignment as stated in your paragraph below.

"As a general matter assignments are governed by contract law, and an assignment is subject to the same requisites for validity as are other contracts, such as intent, mutuality of assent, capacity to contract, legal subject matter, and consideration."

Wouldn't your intent have been to make a commission by selling the property of another as you never intended to or had the ability to purchase it yourself? You stated previously that you had no ability to buy it.

 "At that time I didn't know about BP, did not have any money of my own to buy and had no buyer's list to go to. How would you overcome that type of objection when you are dealing with a wholesale situation??"

I do not know to much about real estate practices in Illinois. It is very possible I am incorrect. They are pretty strict on this stuff in Ohio (were I operate) so I know it would not fly there, but the law I am reading for Illinois looks pretty similar to Ohio's as do many other states.

Remember, we are no long talking about real estate agency, so there is no commission involved; we are talking about the elements of a contract. An assignment is subject to the same requirements that any other contract would be subject to in order to determine it's validity. When I look at the "intent" as it refers to contract law is the reason that the parties entered into the agreement. If my intent was to enter into a contract to defraud the seller, then I would violate contract law. My intent was never to defraud the seller nor was my intent not to get the property sold.  My intent was to create a win-win for the seller and myself. There's no law that says I cannot intend to make a profit; I just cannot intend to make that profit by pulling a fast one when I create the contract. At its purest form, any contract of any type is created with the intent for both involved parties to benefit, whether financially or otherwise. Agreeing to buy something at one price and selling it a higher price and keeping the difference is the basis of capitalism itself. It's when it is done with the "intent" to defraud or take advantage of someone that a violation occurs.

Jeerry,

I disagree. A person's intention to pull a fast one on the seller or not does not change the definition of a Broker.

Morning@James Wise ...I agree, you're right, intent does not change the definition of a broker. I was speaking of intent as it is referenced in contract law regarding an assignment of one's own right to purchase a property. The definition of a broker is someone representing someone else in a transaction. 

Morning@James Wise ...No, you're right, intent does not change the definition of a broker. I was speaking of intent as it is referenced in contract law regarding an assignment of on'e. The definition of a broker is someone representing someone else in a transaction. 

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