If one were to want to wholesale a property found on the MLS, how much involvement would a real estate agent have? I mean, I know the agent that has the listing will obviously be involved from the seller's standpoint, but would the buyer need to use an agent of their own for submitting an offer or would it be better just going through the seller's in order to cut down on having to pay commissions? Or is it a flat 6% either way you go whether all of it goes to the listing agent or it's split with both agents getting 3% each?
Either way, would the offer be handled the same way as a typical wholesale with the buyer getting the property under contract with an "and/or assigns" clause in it?
It's like the typical wholesale deal but it can be tricky. Firstly, the and/or assigns is normally out of the question for shortsales and especially for REOs and some agents will balk at it for regular sales. The next hurdle, is showing the property to your buyers. The agent may give you the lockbox code which makes your life easy but if they don't, you will have to coordinate with the agent to show the property to your buyers. Your buyer could come with an agent that will charge them a percentage or they could come on their own. Either way the listing agent will get his/her percentage.
Will atleast here in Miami it's that way.
That's why some wholesalers get their license so they can go to the property without ever meeting the agent. We've bought properties through the same agents over and over again, and I've never met them face to face. Just phone calls and emails.
Actually, I would be the buyer and the properties would be right off the MLS. No short sales or REOs. I would be presenting my offer(s) straight to the listing agent with the "and/or assigns" in the contract for the seller to sign.
Yeah, that's what I'm already in the process of doing so I could be my own "buyer's agent."
So, basically, I would just present my offer to the seller's agent then?
We have a guy here in Columbus who does some of these. It really makes the deal look bad whens someone is trying to wholesale it for $100k, and you get on MLS and see it is in contract and list price was $95k. If it was on the MLS and they didn't get offers above $95k, what makes it worth $100k to you or your buyers?
I'm not saying it can't work with the right agents and transactional funding if you don't have the cash, but keep in mind this could be a turnoff for your cash buyers.
There are a plethora of wholesale "deals" I see via the various wholesalers in my area that either are, or have been listed on MLS, and they are offering for not much less than the list price. Particularly from the newbies, it's almost comical.
As @John Horner mentioned, so that you do not turn off your cash buyers, you'll want to negotiate a significant discount to the MLS listing price to make it a deal worth pursuing.
@Clint Weir , I present my offer direct to the listing agent like you. I was sending LOI's at first because here in Tampa, if the seller likes the offer the agent will send it back to you on their contract. Then I'll just add an addendum if I want to change something. As for paying the listing agent, I try to get the seller to pay them but it's negotiable. If it's a wholesale deal, you don't want to many hands in the cookie jar.
So I am tagging a question on to this one. I am a newbie wholesaler. I am considering getting my license so I can market to investors. What exactly do you have to let the property owner know when you are an agent wholesaler?
Yeah, that's what I was thinking.
Thanks for the info. guys.
@Thomas Weir I was wondering if you could share your technique in more detail. I'm more curious about Apartment Complexes and how this would work with what you mentioned.
@Jerald Alford LOI's are pretty standard on Apartments whether it's listed with a broker or not. The LOI should lay out what your willing to offer and if they accept it then you do the contract. The good thing about apartments is that the closing date is usually 30 to 90 days out giving you more time for due diligence. This also gives you time to find a buyer if wholesaling
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