As a wholesaler how do you work with agents?

Question

I'm pursuing a deal that requires I work with an agent, how exactly does this process work?

Damon Marshall · Answer

Moses K. Thanks for the advice I will take that into consideration

Rachel H. · Answer

If you do wholesale, it's best to be prepared should you not be able to resell to an end buyer in a timely fashion. Doing what you say you are going to do will earn trust with real estate agents and perhaps a steady stream of leads in the future. Best of luck!

Brandon Kargol · Answer

Using realtors in your wholesaling business is very effective. They can help in a few ways.

1. They can email you expired listings from the MLS. These are typically very motivated sellers and most of their properties are in great condition!

2. They can again use the MLS to help you pull comparable sales on a property. This is very helpful!

What can you offer them in return?

Any lead that doesn't work for you can be referred to your realtor friend! It's free marketing for them. Hope this helps!

Damon Marshall · Answer

@Brandon Kargol Yes that makes a lot of sense. I assumed working with a realtor as a wholesaler wasn't too much of a possibility I just wanted to get some insight.

Brandon Kargol · Answer

It could be this simple, but probably not. Remember, the seller has an agreement with the realtor to pay them a certain percentage for commission. You as the wholesaler cannot interrupt that agreement.

Whats your reason for wanting to purchase this property? Why is this an attractive lead for you? If it's because you like the property then you're doing this for the wrong reasons. Fall in love with the deal not the property.

Here's the way I see it.

220K ARV means that your offer can't be anymore then the upper 140,000's (and the seller still needs to pay the commission!) to pull about a 5k profit. This is assuming that the property is in NO need of repair what so ever. If the seller is motivated to make a deal like this happen then the odds are that the seller wouldn't be listing the property with a realtor. As listing with a realtor generally takes 3-6 months to sell and close on the property. Sellers who list with realtors are most likely looking for market value on their property. Also, the realtor is going to want to protect their commission, and when they see a lower offer like that then it's not gonna go well. I'm not trying to be negative about this deal, or to say that it can't be done. I want to make sure you're going in the right direction! No need in wasting time on a deal that won't happen.

Moses K. · Answer

@Damon Marshall Shouldn't be a big issue. In your assignment contract just hash out how much the real estate agent will be paid, which will be deducted from your assignment fee.

Damon Marshall · Answer

Thank you guys for the responses, I dont have any comps just the asking price which is 220K I wanted to get some insight before I did any due diligence. I know I have cash buyers in the same zip. @Brandon Kargol

@Gerald Harris

Brandon Kargol · Answer

If you have a good deal on your hands then it might be worth jumping through the hoops to  make it happen. Do you have any details of the deal so we can help you decide whether its worth pursing or not? ARV, repair costs, and asking price would be good info so we can help.

Gerald Harris · Answer

Its tricky.   Its really on the unethical side of business.

You may want to approach an agent as a serious investor with funding.   Use transactional funding as a way to invest.   Find agents who understand double closings.

Here is a link and some articles that will understand this

http://www.biggerpockets.com/renewsblog/?s=transac...

Brandon Kargol · Answer

I hope you have one serious deal on your hands, otherwise I my opinion I would avoid any realtor deals like the plague. Couple reasons…

1. You never get to talk to the seller directly. The realtor is the middle man between you two. So any offers you make or any counter offers that come your way are bounced between the realtor. This becomes more time consuming.

2. You will probably get asked to show a verification of funds to purchase the property.

3. You won't be able to get nearly as good of a deal because there will be a 6% commission to the realtor.

4. You will be using the realtors contract to purchase the property so you will not have the ability to insert your own clauses.

I am assuming that you are trying to wholesale this property?