Anyone worked with Wholesalers in Tennessee?

[Michelle Barlow]

Interested in a wholesale deal in Knoxville but have never done one. What is the legal process there? What should I beware if I move forward in this buying this deal?

[Adrienne Green]

Hi @Michelle Barlow! I've bought wholesales in TN several times. If you are comparing it to buying house on MLS, the major difference is there are no contingencies. Once you agree to buy the house and pay the Earnest Money Deposit, you're in! There's no opportunity to cancel the contract and walk away due to inspection, financing, appraisal, etc. I will note this is the standard situation for wholesales- since it's a relatively unregulated industry, every wholesaler can do things their own way!

Buying from a wholesaler can be fabulous!  I would just make sure you really feel comfortable with the house's condition.

[Kyle Deutschmann]

The wholesaler is not a fiduciary/agent to you so you have to be careful you’re doing all your own due diligence. I’d make sure you have a good title company, lender, and property manager to get a second opinion from if you’re not using a buyer’s agent to facilitate the deal. 

I’ve seen wholesalers sell deals with existing financing in place and tell the mortgage company the new owner is simply managing the property and taking over payments - seems a little risky to me but I’ve seen credible title companies close the deal with those documents in the file. Seems like that risk falls more so on the seller if you stop making payments. 

[Michelle Barlow]

@Kyle Deutschmann. THANK YOU.