Same deal from two wholesalers. What is the right thing to do?

Question

I have signed up with several wholesalers. Quite often, wholesaler A sends me a property and a few days later, wholesaler B sends me the same property but with a slightly increased price (including his fee). Wholesaler B does reference wholesaler A in the email though.

What is the right thing for me to do in this case if I am interested in this property? I guess only wholesaler A has the property under contract and I realize that I do not have any obligations toward either of them.

Is it OK if i just ignore wholesaler B and contact wholesaler A directly?

Simon

Account Closed · Answer

The one has the lowest price is the one you go with.

Simon Stahl · Answer

Thanks for the input. @Chris Boyd and Account Closed I think there is a place for wholesaler in this RE world. They do a lot of work to find deals (well, some of them at least). For me, if someone can bring me a deal that makes sense, I am more than willing to pay a small fee for that. I will of course always run my own numbers though. I am not just going to believe them what the ARV is going to be or how much the rehab is going to cost.

John Thedford · Answer

@Simon Stahl

Without a doubt don't believe everything they say. Remember, they have no accountability. They have no license to lose. Their only interest is in making money at any expense. The scammers protect other scammers in the business. Right @Chris Boyd. I just met with a victim of one of these frauds. They are promoting her house all over CL and BP and they don't even have a contract! Another one of these frauds was asking about a "marketing fee". They cannot charge that unless they are a licensee. Laws and regs mean nothing to some of these fringe operators. Anything for a buck. Any way they can get it!  Why isn't their "profession" licensed? Because they skirt the laws meant to protect the consumer.

Chris Boyd · Answer

Hey Simon,

Deal with the wholesaler that has the contract with the seller...and avoid people like John Thedford.

All the Best!

John Horner · Answer

I have seen many situations where a reputable wholesaler who is licensed has a deal and some crappy wholesaler catches wind of it and blasts it out without the first wholesaler having any knowledge.  I don't disagree that most wholesalers don't do it right, but some do.

I'm just saying, I wouldn't go around people without knowing the full story.  I had a guy screw me over in a similar way a couple years ago and I tell everyone I know about him.

Jay Hinrichs · Answer

@Simon Stahl  go around both of them.. if they can't get their act together.. simply find who owns it and make an offer direct.. unless your a really high volume buyer who is relying on these folks.

and also Account Closed  it is illegal in CA to act as a RE agent without a license. the ability to assign contracts is a very narrow one... which most wholesaler simply don't follow so they are violating the laws.. there is a tab on the BRE CA website to report unlicensed activity.  I hear FLA is firming up as well. whats your take on that your heavy in FLA... other states its fine though as we know.. especially Texas

Jay Hinrichs · Answer

@John Horner  I hear ya but when its  amateur hour in my mind its a free for all.

out of the way over 100 homes a year we buy I bet we dont buy more than 10 to 15 from wholesalers..

and I personally will not deal with them unless they are very well known to me..

John Thedford · Answer

@Ryan Dossey

Here is what I tell people to help protect them from unlicensed brokers:

Before you deal with any unlicensed broker here are a few ideas to help protect you:1. Demand a copy of the contract that proves they have interest in the subject property2. If they make value claims, make them provide WRITTEN comps (and make sure they make sense)3. If they make ARV claims, make them provide WRITTEN bids from licensed contractors4. NEVER pay a non-refundable fee

Remember, most of these guys are unlicensed brokers skirting the laws. Most have no license, no education, and no insurance. One of the top ten reasons agents get sued is misrepresentation of value. If one of the fringe operators makes misrepresentations, who can you complain to?

The scammers always come to the defense of other scammers. Just scroll up to see who:) They HATE the fact I am posting info to help protect new guys from becoming their next victim! The next time one of these unlicensed brokers asks for a non-refundable fee, ask them if they give the seller a non-refundable fee:) We already know that answer!

An agent will not or should not make any ARV claims. They WILL get sued. An agent will not or should not give rehab estimates. They tell the buyer to get their own. Generally, when submitting a contract through an agent there is a refundable EM deposit. Note the difference between dealing with scammers and dealing with professionals?

John Thedford · Answer

@Jay Hinrichs

You bet FL is coming down on some of these guys. We just had someone from DBPR come speak at our REIA meeting. Of note was their take that to be valid, a contract must have "reasonable" EM. No BS $10 on a 500K house. No 25 escape clauses, etc. They know what is happening and are seeing the victims. I just met with a seller that is a victim. They brought through an "inspector"...that was the lie....who was in reality someone they were trying to assign to. A licensee would NEVER get away with this garbage..and they should not. These fringe operators have no oversight. It will take many more victims until all the states put an end to this garbage. If you want to work as an agent, BECOME an agent! Very simple solution that gives buyers and sellers some protection.

Ryan Dossey · Answer

I had a new "wholesaler" make the mistake of doing this. She added $15,000 to the other guys asking price. On top of that she made the mistake of CC'ing her entire list on one email. The original owner had it listed online (local legit wholesaler) so I replied all with a copy of the guys asking price and asked what value she added to earn 15k? None.

Same deal from two wholesalers. What is the right thing to do?

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