Why should wholesalers not buy homes listed with a realtor?

7 Replies

Hey BP,

Every script I see for wholesaling asks, "Is your home currently listed with a realtor/agent?"

...and if the answer is yes, then move on.

Why is this? Is it just bad for business?...or are there ACTUAL consequences/restrictions for doing so?

Thanks BP,

Jordan

The objective of a Realtor is (usually) to sell for highest price.

The objective of the wholesale buyer is (usually) to buy at the lowest price.

Not so much a matter of ethics, assuming you'd be putting your offer through the Realtor.  More a case of conflicting objectives.....you're trying to resell to an investor who wants to buy below market, so you need to buy at below market, then less your fee.  The realtor's objective is to sell At market, which is more than your end buyer wants to pay, much less even lower to include your fee.  If you were trying to wholesale cars, would you try doing your buying from a retail car lot?

@Michael Quarles  , @Bill Gulley  

Thanks for your input!

When I started this discussion, I wasn't aware that the seller was CONTRACTUALLY obligated to sell through the realtor for a certain time duration.

Yes Jordan, sellers are obligated by agreement.

You really, really, really need to begin in RE studying the basics of RE, which no guru on the planet goes into, either sufficiently or at all. Every state in the country requires agents to go through a very basic study course to introduce them to the business.

It is possible, not likely in most cases, that you could work a deal with a Realtor, they usually see wholesalers as conducting business as an agent without a license. There could be some distressed property that a Realtor has listed where they can't get it sold and would work with you, but you'd need to know how to deal with them.

You can just skip the basic stuff and head on out, follow some guru or wholesale mentor program, take the low road, bump into problems, have more difficulties, step in it, get pie in your face dealing with other professionals, maybe get a bad reputation and be avoided by others, end up messing over some homeowner, for a few years learning by trial and error, or, you could begin by studying where all the professional types begin and avoid all those issues. Good luck!  :)  

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