What is the Wholesaler's Risk?

Question

BP,

What kind of risk, if any, does the wholesaler assume by putting a property under contract? Are they agreeing to buy the property if they cannot find a buyer after a certain amount of time?

Jay Hinrichs · Answer

@James Danchus  don't have too I did many deals and still do on handshakes

James Danchus · Answer

So doesn't that mean the contract is essentially useless? Why would you use the contract at all? Why do people bother with it?

Jay Hinrichs · Answer

in my mind your risk is from your conscience  or your carma or your god.. take your pick.

Or just disclose up front that you are going to try to resell it and make a profit over what you are paying the seller and if your efforts fall short then you do not get compensated and the seller after the period of time you negotiate to sell said property is free to work with anyone else.

were this gets dicey is the subterfuge that goes on in the industry IE you telling someone your the buyer when you know in your heart your not and your trying to make a marketing fee.

In some states this is considered selling real estate without a license and you can get in legal trouble.

but as a whole there are no code of ethics in the wholesaling space.. its a free for all so let your conscience be your guide.  I have seen both sides from the low down lying snake in the grass to the very up front person... just decide what fits you best.