Over Hyped Wholesale Properties

[Mike Waters]

I've been looking for flip opportunities in the Dallas area and started receiving packets from a few wholesalers. Most packets include questionable hyped up statements along with inflated CMA/ARV claims.

Are there any wholesalers or agents with integrity looking to do business with a serious buyer? If so, please contact me.

[John Thedford]

Welcome to the reality of most of these unlicensed brokers. Your post reinforces many of my posts about being CAREFUL dealing with unlicensed brokers. Keep in mind they are not representing sellers, are not accountable, etc. To avoid being taken by them, I have a list of recommendations:

BEFORE you deal with any unlicensed broker consider these ideas:

1. Always require WRITTEN comps that can be substantiated

2. Always require WRITTEN bids from LICENSED contractors

3, Always require WRITTEN comps to substantiate ARV

4. NEVER pay a non-refundable fee

5. Always correspond via email so there is written record to bring suit in the event of misrepresentation.

6. Always demand to see a copy of their contract.

Remember, these are middlemen trying to play RE agent without a license. Make sure they provide GOOD comps. Make sure if they are representing an ARV value make them provide ARV comps. If they make claims about rehab costs, make them provide WRITTEN bids from contractors. They are brokering real estate so make them PROVIDE good quality information like you could get from a licensed broker. Many of these unlicensed brokers simply make up figures that sound good but cannot back them up.

Unlicensed brokers generally have no insurance. From personal experience most just pull their ARV out of thin air. Lets see: claim it costs x and it will sell for y. If someone uses an agent, an agent won't provide or should NOT provide the BS an unlicensed broker does. They should not or do not provide rehab figures (to protect themselves). They should tell a prospective buyer to get their own bids. They can provide comps in some situations on an updated unit vs an original unit. Agents have something to lose, can be fined, and have their license suspended or revoked. Unlicensed brokers, acting as fringe operators skirting the laws have nothing to lose. They are acting as an agent without the laws, ethics requirements, education, and insurance that are vital IMO. IMO most are not providing a "service" as they claim. Their goal is to beat a seller down, slice off a chunk of equity, and push the "deal" on to someone else. An agent's job is to get the most for the seller which is an exact opposite of what unlicensed brokers do.