Found a deal, now what!?

Question

Ok so I found a deal, I have a buyers list, my problem is how do I get the seller to agree to let me put the property under contract, until I locate my buyer? What do I say to the seller? How do I go about doing this?

Lydia R. · Answer

@Dorian Dixon I would phrase it more along the lines of “ I mentioned to a colleague this great house Im buying (sellers house) and he loves this neighborhood and has been looking for a project here for months. He asked if we could partner and work together. I told him only if my seller doesnt mind.”

This does a few things, it will make the seller feel good about their home—everyone likes to be complimented on the things they have. It also will get the seller to ask what it means for them and you can honestly tell them that the terms of your contract wont change. They will get the same amount of money that you promised them. The seller will also appreciate the idea that you arent agreeing to anything without their approval (even though you dont really need it) it makes them feel like part of the process. Some sellers need that. Some dont give a rats butt as long as the check clears. Just know your audience! Hope this helps!

Lydia R. · Answer

@Dorian Dixon You give yourself a closing date 30 days from the date you sign the contract, give yourself a way to either back out of the deal or extend the closing date in the event that you cannot find a buyer. If it is a good deal it will not take long to find a buyer.

Lydia R. · Answer

@Jay Kennedy Id be careful about the MLS. Im pretty sure its a big No-No to put a property on the MLS that you dont actually own. Now you are in “brokering without a license” territory and that comes with fines and all sorts of other consequences that you dont want. Zillow is more of a gray area, as long as you state in your post that you are selling your equitable interest and not an actual property—I have seen other wholesalers in my area do this. But Im not an attorney, definitely check with one in your area before you do that. But absolutely do not attempt to put a property you dont own on the MLS unless your state’s Real Estate Commission has some kind of crazy loophole that allows this.

Monique Rene Coates · Answer

I hope no-one minds if I jump in to this conversation. I might learn why I have not made a DIME trying to wholesale OFF-MARKET properties in years . . . .

SCENARIO #1 = I have a decent buyers list.  I work with an off-market seller / broker. I market their properties to my buyers list. We signed NDA = seller and myself (birddog).  My buyer's list and I have signed NOTHING.  Q. Is this Seller just taking my potential bird dog commission? I have been marketing his off-market properties for over a year.

SCENARIO #2 - Major seller/broker approaches me and wants me to sign NDA / CA as principal buyer. I said NO. I do not have the resources, but I would delegate the NDA / CA to a wholesale partner / buyer.  Seller said BUYER PAYS COMMISSION on all sales. I said fine. This partner I delegated the NDA to, I told them that "buyer pays commission." They said fine. I sent them the NDA, they signed. I received copy from seller. Seller was happy.  My LLC is no-where to be found on the document. Q. Should my delegated principal wholesale buyer / partner and I be signing a commission agreement that is SEPARATE from the NDA / CA they already signed with my seller / broker?

Thank you ALL for your assistance. I appreciate it.

John Thedford · Answer

If you don't have money to CLOSE you are lying to the seller from the outset. You have been given some "great" advice from FRAUDS AND SCAMMERS how to deceive sellers.

Jay Kennedy · Answer

Yes, of course, it’s always best to consult an attorney. In my experience, I’ve never had any problem in any state that I’ve wholetaled. The MLS is not a government entity, so they cannot punish you under the law. They do have rules, but I also disclose in my contracts that I will be marketing the property on the MLS and I will be making a profit when I sell the property. I also have equitable interest in the property as I have given the seller an earnest money deposit.

As far as an actual legal issue, I’m not an attorney, but if I purchase a property (with the end buyer’s funds if the law allows, or with transactional funding, hard money, money I borrowed from friends or family, or my own money) I am pretty sure I am able to sell it to whomever and at the best and highest price I can without getting in trouble with the law.

I am NOT talking about brokering a deal or selling a contract here. I’m talking about buying and selling property.

Jay Kennedy · Answer

@Dorian Dixon yes exactly what Lydia said, it’s up to you how much you tell your sellers and what you’re comfortable with. As far the contract goes I’d try to get as much time as possible, 45 days if you can, with an option for you to close sooner in case you find your buyer and they can close quickly. That way you get paid faster.

After having the contract signed, I’d put it up on the MLS and market it there for full value and only accept cash offers with a non-refundable deposit; instead of selling it off market to another investor who will give me nowhere near full value.

Dorian Dixon · Answer

@Lydia T. Ok really great information, I appreciate it. So the best thing to do is to be upfront with the seller and tell them that I am going to wholesale their property to another investor?

Lydia R. · Answer

@Dorian Dixon Its up to you how much information to share with your seller. Some sellers are resistant to the idea that you are going to market their home to other investors and some sellers just want to get paid as quickly as possible. Assess which kind your seller is and go from there.

Found a deal, now what!?

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