Telling buyers your a wholesaling

8 Replies

Should you tell your cash buyer that your wholesaling I think theirs many pro to telling your buyer but I worry they might cut the middle man out (being me) and turn straight to the source am I over complicating things?

Always be straight and honest in your dealings.  I'm sure that's how you'd want to be treated.  I always let the buyer know that I'm wholesaling the property.  I'd be surprised if they can't figure that out anyway.  Will they try to cut you out.  A few might.  But you'll quickly learn who they are.  

Most buyers don't care if you are wholesaling the property.  They simply want a good deal.  If you give it to them.  You'll do more business with them.

@Malik Batchelor - If you are truly doing a wholesale, there is no way they can cut you out. You're not the middle man, you're the owner.

There is much confusion here on BiggerPockets about wholesaling. A true wholesale is when you buy (and close) at deep discount and sell for a profit. You go on title as the owner when you purchase. Then you sell to your buyer.

You must not be planning to do a wholesale, but are planning to do an assignment. An assignment is when you get a property under contract and then sell (assign) the contract for a profit. 

If you don't want to be cut out of the deal, you can record an Affidavit and Memorandum of Purchase and Sale (not the purchase contract) at the courthouse which lets the world know that you have this property under contract. Another buyer can't close until your contract is satisfied.

Originally posted by @Karen Rittenhouse :

@Malik Batchelor - If you are truly doing a wholesale, there is no way they can cut you out. You're not the middle man, you're the owner.

There is much confusion here on BiggerPockets about wholesaling. A true wholesale is when you buy (and close) at deep discount and sell for a profit. You go on title as the owner when you purchase. Then you sell to your buyer.

You must not be planning to do a wholesale, but are planning to do an assignment. An assignment is when you get a property under contract and then sell (assign) the contract for a profit. 

If you don't want to be cut out of the deal, you can record an Affidavit and Memorandum of Purchase and Sale (not the purchase contract) at the courthouse which lets the world know that you have this property under contract. Another buyer can't close until your contract is satisfied.

 Would Contract being Satisfied mean the expiring of the contract as in the close date was reached?   

@Charles M.

Contract being satisfied means that whoever filed the contract releases it so the title is no longer clouded. It can be released for many reasons including the purchase went through without incident. If someone else comes along to buy it out from under you and finds your contract during the title search, they either back out or have to pay you to remove your lien so they can then purchase the contract themselves. 

Clouding the title gives you control if another buyer comes along. And it's not always another buyer that's the problem - it can be the seller who tries to cut you out because they want to accept a higher offer.

Originally posted by @Karen Rittenhouse :

@Charles M.

Contract being satisfied means that whoever filed the contract releases it so the title is no longer clouded. It can be released for many reasons including the purchase went through without incident. If someone else comes along to buy it out from under you and finds your contract during the title search, they either back out or have to pay you to remove your lien so they can then purchase the contract themselves. 

Clouding the title gives you control if another buyer comes along. And it's not always another buyer that's the problem - it can be the seller who tries to cut you out because they want to accept a higher offer.

 Our state wont allow this to be done unless the seller signs as well..  and if someone did that to me I would sue them.. for damages. bad advice in my mind.. but regardless when the contract close date expires lets say its a 60 day close then the contract is void and the buyer and seller can get around this cloud..