Wholesale MLS property

8 Replies

Hey BP! 

I hope everyone had a great weekend. Here is the situation. I was contacted by a seller from my direct mail campaign. He has a house listed at 69.9K since March. He also has 4 other properties that he's willing to part with. I don't know if they are listed or not as he didn't send me any I do on them yet. I want to treat him right so that I have the opportunity to help him with the other properties. These houses are in Philadelphia. 

After viewing the property, I called him and said we don't tend to deal with MLS properties. He said we'll shoot me a number. We agreed at 12.5K. I don't have any contracts in place yet with him. I wanted to come to BP first to ask what I should do.

How should I move forward? What should I watch out for? How do you handle wholesaling listed Philly properties? 

Thanks for all your wisdom,

Mark

From 69.9k to 12.5k?? Call me crazy but that sounds like an 80% discount. 

I would ask him if he is going to cancel the listing or is he still going to pay the agent a fee. It is his decision what he wants to do. Ideally, he would cancel the listing and you buy directly from the seller.  If he is still going to pay the agent, then just raise the price a grand or two to pay the agent and get the contract.

Either way, get it under contract, and start finding a buyer.  It sounds like there will be a good wholesale fee coming to you pretty soon.

Good Luck!!

I'm not an expert especially not in Philly, but doesn't it sound a bit shady, he dropped the price so low, but like I said I don't know the Philly area. 

I would suggest that you do your research on the seller and on the property before you hand over any $$

To me it just sounds to good to be true, but that's just me.

Good luck.

You also need to know what type of listing the seller has with the agent. Some listings will put the seller on the hook even if the property is sold outside of the MLS. You don't want to get all the way to the closing table to find this out.

Originally posted by @Lucero Sanchez :

I'm not an expert especially not in Philly, but doesn't it sound a bit shady, he dropped the price so low, but like I said I don't know the Philly area. 

I would suggest that you do your research on the seller and on the property before you hand over any $$

To me it just sounds to good to be true, but that's just me.

Good luck.

 I would agree with this but you'd have to see this particular property. It's a burned out shell. The agent that has it listed priced it astronomically high and it's been on the market a long time. I forget DOM but it should've been priced in the $20k range at best. You can only walk a few feet in as the 2nd and 3rd floors collapsed into the 1st floor and some of that likely fell into the basement. It's been like this for at least 5 years. IIRC, the backstory is the guy is retirement age and ready to move on. I happened to be in the neighborhood when @Mark Redmann was looking at the place and stopped by. Scary! 

@Richard Pozos

 @Lucero Sanchez

 @Andrew Sky

Thanks for the replies.  I tend to agree with you also.  Does seem a bit shady. The seller didn't even counter or anything.  He was quiet for a minute and said "hmm, ok we can do that."  Makes me think something is up.  @Troy S.  The seller said the fire was only in the front bedroom and that he didn't know the rest of the house was in such bad shape.  I need to do some more research. This all caused me to pause and think about it before moving forward putting the offer in writing.  

Do any of you guys have any input on how to wholesale MLS properties? I've read mixed reviews on BP about it. Putting this particular "deal" aside, how do you wholesale MLS properties? Thanks!

@Rick Pozos Has ball parked a reasonable, but admittedly, top end list price. Work your numbers down from there. 

Alternatively...Maybe someone could weigh in on structuring an option contract or something else that could allow you to market to your buyers without giving the seller a deposit? I'm not very familiar with the process but I think this is a scenario where its a reasonable strategy. 

In most cases the listing agent will argue that their MLS listing procured a buyer and that the seller is obligated to pay a (roughly) 3% commission. Plan accordingly.

Originally posted by @Troy S. :
Originally posted by @Lucero Sanchez:

I'm not an expert especially not in Philly, but doesn't it sound a bit shady, he dropped the price so low, but like I said I don't know the Philly area. 

I would suggest that you do your research on the seller and on the property before you hand over any $$

To me it just sounds to good to be true, but that's just me.

Good luck.

 I would agree with this but you'd have to see this particular property. It's a burned out shell. The agent that has it listed priced it astronomically high and it's been on the market a long time. I forget DOM but it should've been priced in the $20k range at best. You can only walk a few feet in as the 2nd and 3rd floors collapsed into the 1st floor and some of that likely fell into the basement. It's been like this for at least 5 years. IIRC, the backstory is the guy is retirement age and ready to move on. I happened to be in the neighborhood when @Mark Redmann was looking at the place and stopped by. 

Gotcha, that explains the price drop, a few years back someone we know got a house that had bad fire damage and he got it for $15k so it makes sense,  it just wasn't mentioned in the original post. Thanks. ;)

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