Wholesaler · Dayton, OH · Member since 2016 · 252 posts · 227 votes
When you wholesale contracts, do you generally take all contracts to closing and get paid at closing, or do you have the buyer pay your fee before assigning them the contract. I've heard both options touted recently.
I suppose the benefit of the former is that the buyer doesn't know what your actual fee is, but is just negotiating with you on their purchase price (which includes your fee). The benefit of the latter is that you don't need to be too involved in the closing, and here in Ohio where it's getting legally murky about whether wholesaling is legal, I think some of the Ohio wholesalers are doing it so that it's very clear they are selling a contract and not a house.
Sure. We always tell our sellers that one of three things will happen: 1. We will buy property, make any improvements, and sell it to a nice family. 2. We will buy property and rent it out. 3. Or we will pass it along to one of our fellow investors.
This way, seller knows our position at all times. Communicate with seller throughout the process as well. It makes everything easier.
We have done both. It really depends on the deal and the people involved. We are always transparent with the seller, and buyers can be picky when dealing with wholesalers. We are looking for the best "Three Legged Stool theory", that is, a Win for all parties.
Thanks @Chris Boyd. When you say you are transparent with the seller, can you give me an idea of how you describe the process to your sellers? I'm on the fence about how much and how little to disclose to the sellers.
Sure. We always tell our sellers that one of three things will happen: 1. We will buy property, make any improvements, and sell it to a nice family. 2. We will buy property and rent it out. 3. Or we will pass it along to one of our fellow investors.
This way, seller knows our position at all times. Communicate with seller throughout the process as well. It makes everything easier.
Thanks @Chris Boyd. I'm curious, have you ever encountered resistance with that approach? Have any sellers every given you push back and how did you deal with that?
@Steven Leigh I think the pushback from sellers that wholesalers receive is mostly when they don't tell them they themselves won't be buying the house until after they have a contract. I've walked through many houses with clients trying to buy an assignment and it is clear as day the seller was not in on the deal from the start. I like @Chris Boyd's strategy though, because at the end of the day, the seller doesn't care who buys it, as long as someone buys it. And the way Chris frames it makes it clear that if he doesn't assign it, he'll buy it.