Cash buyer wants to know my fee

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y

For all the don't disclose replys is the whole reason I will not deal with wholesalers either as a seller or a buyer...

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  • Brian Schmelzlen
    Accountant · La Mesa, CA · Member since 2017 · 477 posts · 476 votes
    8y

    I am not a wholesaler so take my opinion with a grain of salt, but I would tell him.  He might try to use it as a negotiating point, but don't let him.  It is either a good deal for him or not.

    The seller, on the other hand, I would avoid telling.

    0Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y
    Is it public record anyways in Illinois? If it is it doesn’t matter. If not, I’d probably tell him anyways
    0Reply
  • Tom Chen
    Real Estate Investor · Flushing, NY · Member since 2016 · 210 posts · 77 votes
    8y

    Personally, I wouldn’t tell him. It’s none of his business. 

    0Reply
  • Dantrell Baker
    OP
    Developer · Dekalb, IL · Member since 2017 · 10 posts · 0 votes
    8y
    Originally posted by @Caleb Heimsoth:

    Is it public record anyways in Illinois? If it is it doesn’t matter. If not, I’d probably tell him anyways

     No, it's not public records. Thanks.

    0Reply
  • Dantrell Baker
    OP
    Developer · Dekalb, IL · Member since 2017 · 10 posts · 0 votes
    8y
    Originally posted by @Brian Schmelzlen:

    I am not a wholesaler so take my opinion with a grain of salt, but I would tell him.  He might try to use it as a negotiating point, but don't let him.  It is either a good deal for him or not.

    The seller, on the other hand, I would avoid telling

    Thank you.

    0Reply
  • Tarcisio Mora
    Realtor · Suisun City, CA · Member since 2017 · 58 posts · 14 votes
    8y
    I think transparency is important because it will strengthen your relationship with the buyer if he knows what to expect from you and it can lead to more deals
    0Reply
  • Dantrell Baker
    OP
    Developer · Dekalb, IL · Member since 2017 · 10 posts · 0 votes
    8y
    Originally posted by @Tom Chen:

    Personally, I wouldn’t tell him. It’s none of his business. 

     I was thinking the same but I don't want to screw things up with this deal.

    0Reply
  • Dantrell Baker
    OP
    Developer · Dekalb, IL · Member since 2017 · 10 posts · 0 votes
    8y
    Originally posted by @Tarcisio Mora:

    I think transparency is important because it will strengthen your relationship with the buyer if he knows what to expect from you and it can lead to more deals

     Your right. I'll be transparent and see where it goes. Thank you.

    0Reply
  • George SkidisPro Member
    Rental Property Investor · Belleville, IL · Member since 2017 · 875 posts · 529 votes
    8y

    My fee is non negotiable. Glad to disclose it after the closing.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    For all the don't disclose replys is the whole reason I will not deal with wholesalers either as a seller or a buyer...

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  • Mike H.
    Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
    8y

    I don't see why you wouldn't tell him. It'll give you an opportunity to justify it too. But I might wait til he signs the purchase contract with you. I wouldn't have a problem telling a buyer but I don't know that you'd want to give him any info about your business if he isn't a customer yet. And they're not a customer until he signs the contract.

    Ultimately, he's going to find out eventually though if he really wants to. 

    1Reply
  • Mitchell Pollard
    Realtor · Germantown, MD · Member since 2016 · 35 posts · 24 votes
    8y
    I am a new Wholesaler and I have found that when telling the cash buyer your assignment fee, they try to use it as a negotiating point. Often times cash buyers aren’t as hard pressed as us wholesalers to close deals. Don’t tell him your assignment fee. If it’s a good deal and he wants it, he’ll take it.
    2Reply
  • Tom Chen
    Real Estate Investor · Flushing, NY · Member since 2016 · 210 posts · 77 votes
    8y
    Originally posted by @Dantrell Baker:
    Originally posted by @Tom Chen:

    Personally, I wouldn’t tell him. It’s none of his business. 

     I was thinking the same but I don't want to screw things up with this deal.

     To me, it sounds like he wants to get shady and possibly bypass you. If he’s making money on the deal, it shouldn’t matter what your fee is. 

    4Reply
  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    8y

    If there is a double closing and both deeds are going on record, the spread is public record.

    If there is an assignment, that fee goes on the settlement statement.

    Anyone with half a brain can figure out what occurred here.

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  • Tom Chen
    Real Estate Investor · Flushing, NY · Member since 2016 · 210 posts · 77 votes
    8y
    Originally posted by @Dantrell Baker:

    A potential cash buyer wants to know my assignment fee. I usually double close. Should I tell him?

     For instance, this cash buyer doesn’t CARE about your fee. As long as the numbers work, and he’s making money, it shouldn’t matter.

    2Reply
  • Jonathan Damon
    Chesterfield, SC · Member since 2017 · 142 posts · 73 votes
    8y

    I don't disclose my fee because it 100% of the time brings it up for negotiation. I would flip it back on him and ask why do you want to know. 9 times out of 10 it's because the price is to high for him. Work the total price not your fee. I work hard for my money and I don't discount myself. 

    2Reply
  • Andy Rumple
    Wholesaler and Real Estate Broker · Indianapolis, IN · Member since 2009 · 438 posts · 293 votes
    8y

    If you double close there is no fee.

    0Reply
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    8y

    It is not any of his concern and he really shouldn't care if he is a pro.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    @Ian Walsh  I consider myself a professional in the industry and defiantly care.. not for the reasons most would think.

    I care on the buyer side as I simply won't be a party to someone totally ripping equity form some uniformed or naïve seller be them aged foreigner or what ever.. I would rather pass..

    And I won't let them make a ton of money on my deals means I am selling too cheap LOL... Although I fund a ton of stuff that has wholesaler fee's in there especially in your market.. its almost every deal but usually 2 to 4k.. but I had one last week were the guy tied it up for 17k and my client paid 40k for it.. but again I am just funding so at that point none of my business it still worked for him.. but if I was the buyer personally I would have passed because some seller just got their clock cleaned and as a NMLS and RE broker we have some fiduciary to the public and take that seriously.

    Now if someone closes on the deal and they own it and trash it out or do some value add then all bets are off I could care less. if it works for me it works for me and the person had the ability to actually close.

     but for assignment fees and what boils down to brokering  no.. not interested ..

    Its pretty funny really I get well probably 10 to 15 cards a week from wholesalers since I fund in 15 states and they want to add me to the buyers list.. and some will even track me down and find my number ( skip trace me) its a pretty comical conversation when I tell them I don't want to be on their list and I could care less if they have good deals I won't be buying from them personally.. They need to track down my vendors and see if they want to work with them.. I Simply don't have the time for ametour hour which is what 97% of wholesalers are.

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  • Kurt Pauley
    Realtor · Minneapolis, MN · Member since 2016 · 245 posts · 107 votes
    8y

    Disclose it to him. Transparency is best. 

    0Reply
  • Yousif Abudra
    Real Estate Investor / Syndicator · San Ramon, CA · Member since 2015 · 93 posts · 91 votes
    8y

    @Tom Chen and @Jonathan Damon are correct.  Your fee is completely irrelevant.  Of course the buyer would like to know what it is, so that they can promptly go about trying to reduce it.  Disclosing the fee only creates noise and hurts the likelihood that the deal will close - regardless of what the buyer tells you.  

    As the saying goes, "buyers are liars" and if a buyer is asking about your fee, it means they are not focused on the overall deal - where their attention should be.  And quite simply, are not serious enough to close.

    You can easily solve this problem by telling your buyer "I don't disclose my fees.  Let me know if this deal works for you, and we can move to close.  If not, I have other buyers who are interested."

    0Reply
  • Jonathan Damon
    Chesterfield, SC · Member since 2017 · 142 posts · 73 votes
    8y
    Originally posted by @Tom Chen:
    Originally posted by @Dantrell Baker:
    Originally posted by @Tom Chen:

    Personally, I wouldn’t tell him. It’s none of his business. 

     I was thinking the same but I don't want to screw things up with this deal.

     To me, it sounds like he wants to get shady and possibly bypass you. If he’s making money on the deal, it shouldn’t matter what your fee is. 

    This brings up a great new point and is why having a good relationship with your seller is important. A buyer can always wait the 30 days and try to swoop in. Me I price my deals to sell and it's next man up. Let him look 30 days later and see it was sold just like I said it would be. 

    0Reply
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