Wholesaling a house listed with a realtor

7 Replies

hey BP,

I got a lead from my marketing campaign today. The house is owned free and clear and has been listed for 2 years!!!! It's listed for 99k but the owner said she would do 75k. Some quick come analysis shows the ARV could be 125k. Is there a way to make this work?

@Shawn Connors

It depends on the seller and the type of listing agreement. If the seller is willing to pay the broker's fee, then there isn't any issue. If the seller is not willing to pay but the seller signed an exclusive right to sell with the listing broker, the seller will be required to pay the broker regardless of it being sold directly by the owner. Most people think they can wait until the listing expires, but most listing contracts have a broker protection clause built in and the seller needs to fully understand what it says. If the seller did not sign an exclusive right to sell, then the broker doesn't have a claim on the property or commission, if the owner finds their own buyer.


Wow!  Thanks Christopher and Shawn!  This is almost the EXACT situation that I am currently in with my very first wholesaling deal.  The home owners did sign the Broker's Right To Sell Agreement and they are willing to pay the Broker's compensation of 6% so my next question would be, since they are willing to pay the Broker their 6% fee can they then move ahead with the sale of the property as FSBO (they would disclose all of this to the Broker of course-complete transparency) and move forward with putting a contract on the house using my Standard Purchase and Sale Agreement and Assignment of Contract Agreement as a Wholesaler of the property? This way I can begin to market this opportunity to my End Buyers. Thank you! Monica

If it has been on the market for 2 years, dont you think thats given it enough exposure to investors...if someone wanted it, it would have been sold by now.

Originally posted by @Russell Brazil :

If it has been on the market for 2 years, dont you think thats given it enough exposure to investors...if someone wanted it, it would have been sold by now.

 I was kind of thinking the same thing - what does the market know about this house that you don't? You mentioned after repair value - so perhaps there is still some value to build into it - question is why has it been listed for so long ? and why haven't other investors jumped on it? sometimes it is cause they come on and off the market if they go under contract , then fall out of contract - I've seen homes that do this 3 or 4 times before a buyer comes in and actually completes a deal. You could be up against something like that - or it could be the area it's in. Maybe other investors never offered 75K or the seller never accepted a lower offer before , but is now willing to after 2 years of being stagnant. Seems like some research into this would be warranted - it could be a good deal - but you don't want to be the one who has it on the market for another 2 years - I would keep following up with it - are the comps strong in the area? 

@Monica G.  No, the agent will still involved, and will have to use their local contracts.

One difference with my scenario is that it has only been on the market for 5 months...

Thank you Wayne for your feedback!

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