What to Bring to Seller Appointment - Wholesale Real Estate

132 Replies

Brittany, How did your meeting go?

Since my first observation of irony was lost on the non-attorney real estate agents in the room who seemed to be too busy practicing law... I’ll make another:

In keeping with the theme of ethics... I wonder how many agents (real estate salesmen) who complain about unethical wholesalers have they themselves for the sake of “getting a sale” either

  • a) Pushed for a seller to accept an offer a little lower than what they could have received if they waited (see Freakonomics pg 7-9)

Or

  • b) Let a buyer purchase above asking price... because “it’s a competitive, hot, sellers, etc market and we need to make a strong offer in order to win!”

Or how many agents warned their clients in the mid 2000’s to rent instead of buy because of how overinflated the market was? Judging by the number of foreclosures that followed... almost NONE. They were too busy seeing $$$ with all those sales.

What’s the verse in the bible that says not to be concerned with the speck in your brother’s eye when you have a beam in your own? 

@Jon Allen   I have represented clients pro bono - more than once - and I CHEERFULLY take listings that need rehab.   In fact I have an active listing like that in Hull, MA.

It needs a new kitchen, new bath, wallpaper stripped, walls painted, floors refinished, wood rot fixed, lots of landscaping.  Oh, yes - the little tiny attic window is open. and has been for some time.  I expect that there's a high critter count up there. 

There is zero chance of it surviving an FHA or VA appraisal.

How's that?

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The real complaint agents and brokers have regarding wholesale transactions is that they aren't involved and collecting commission on them. I can't help but notice that one of the loudest mouths in this thread touts himself as a buyer of distressed properties. I'm quite certain he offers the sellers absolute full retail, so as not to "steal equity that belongs to the seller". It makes one wonder why he might target distressed properties at all..

I've never done any wholesaling, and I've never bought a property from a wholesaler, but any grumbling I have about them picking up great deals just stems from my jealousy that I didn't get there first, and I'm sure many other complainers are chewing on the same sour grapes. Making someone an offer is not robbery. Buyers do not have a fiduciary duty to sellers. Sellers are obviously entitled to simply say "no". If the seller has a better offer they should take it. If they don't even explore other offers, that's their own failure. 

Originally posted by @Brittany Witt :

I'm getting prepared to go on my first seller appointment with a motivated seller. I'm curious about what papers I should bring.

I found a great thread here about what to bring but I have one question, should I bring two purchase and sale agreements and fill them both out exactly the same that way I have a contract and the seller has a contract? 

Or would it be better to fill out a single purchase and sale agreement and I take it with me and I leave a simple offer sheet with the seller, then when I get back to the office I can scan/email the original P&S agreement over to the seller?

Hope this makes sense, thanks in advance.

We got so off track from the original question. She was basically asking how to get a copy of the signed contract to the seller once the deal was done. 

Short answer... just get them a copy later and don't worry about it.

Long answer:

1. Leave the contract in the car

2. Bring a note pad to take notes while speaking to the seller

3. Bring a heart to help the seller. Be genuine. Focus on finding out how you can add value to their situation and solve their problem. If you can do that you'll get the deal and make money in the process. 

4. Understand what value you provide. You aren't the highest priced option. Instead, you offer speed and convenience. 

5. Be transparent. Don't hide the fact that the seller might make more money by listing, but let them know the tradeoff is they'll have to wait for the sale and possibly do a bunch of cleaning up and maybe some updates to get the most amount of money. 

Oh and if you find a win-win solution for the seller and you... be sure to market the contract and not the property. That way, the Mr. Thedfords of the world can't report you. But to be safe, consult an actual attorney... not one of these agents engaging in the unauthorized practice of law. 

@Jeff Cagle   That is - at least in my case - absolutely incorrect.

What really grinds my gears (H/T to Peter Griffin) is that wholesalers in general (and yes, there are rare exceptions) are screwing the seller.

Please don't forget that actual example that I'm working with right now.

A national wholesaler offered my seller client $228,000 for a property that I now have on the market for $350,000.  I expect we'll sell at $335,000 or more.

These snakes were happy to offer my client $100,000 less than the actual current market value - and my clients believed their flim-flam and were almost ready to accept a HORRIBLE deal.

If you can convince me that the seller wasn't about to get screwed HARD by the wholesaler, we can have that discussion.

Originally posted by @Charlie MacPherson :

@Jeff Cagle  That is - at least in my case - absolutely incorrect.

What really grinds my gears (H/T to Peter Griffin) is that wholesalers in general (and yes, there are rare exceptions) are screwing the seller.

Please don't forget that actual example that I'm working with right now.

A national wholesaler offered my seller client $228,000 for a property that I now have on the market for $350,000.  I expect we'll sell at $335,000 or more.

These snakes were happy to offer my client $100,000 less than the actual current market value - and my clients believed their flim-flam and were almost ready to accept a HORRIBLE deal.

If you can convince me that the seller wasn't about to get screwed HARD by the wholesaler, we can have that discussion.

It's simply an offer. Take it or don't. The power resides with the seller. If your client had accepted that offer it's not the buyer who would have screwed them, the seller would have screwed themselves. What happened to adults taking some responsibility for their own actions? It's quite obvious that the buyers do not work on behalf of the sellers. At what point is ANY degree of due diligence the responsibility of an adult in a transaction? If they had accepted a very low offer, they would have been simply paying a convenience fee for their own extreme laziness.

@Charlie MacPherson I have a question about your current scenario with the seller you mentioned who almost got screwed. First of all, I am aware of the major wholesaler you referred to and I am not a fan of theirs at all. They are a perfect example of taking advantage of a seller.

Here is my question to you, as an agent, if you feel the house is worth $335,000 (you said thats what it would probably sell for) then why not list it at $335,000 if thats what the value truly is? It seems that the fundamental argument against wholesalers is the misrepresentation of value for personal gain. What no one has ever addressed is what is the difference between a wholesaler doing it vs a flipper vs a realtor. In your case, not trying to attack you just trying to give a real life example, it seems that same argument could be made. You are listing a property for more than what you think its worth, and you stand to benefit if someone comes along and makes a full price offer. In your same example if it had been an investor who made that same offer to that seller and reaped that 100k+ profit when he flipped the house, would you criticize that investor as harshly as the wholesaler or would they get a congratulatory high five for getting such a great deal?

There are shady characters in every aspect of real estate, there is an investor here who preys on people in foreclosure. He approaches them 3 days before the auction and basically offers them 5k and a moving truck for their homes regardless of how much equity they have. He then fixes the houses and sells them for a huge profit or seller finances them for even more profit. There are no threads condemning investors for this behavior, no one is calling them scammers and frauds even though the only difference is that they are buying the property themselves and reaping the profit. IMO if its wrong then its wrong. A behavior cannot be wrong when one person does it and perfectly fine when someone else does it.

I havent heard anyone advocating for sellers saying that everyone selling a house should put it on MLS and try to sell for the highest price possible. Experienced investors know that its next to impossible to find profitable deals on MLS (perfect example, your 335k house thats listed for 350k) and that its better to market directly to sellers.

Just trying to understand why wholesalers get so vilified. Understandably there are some shady characters out there and I dont condone what they are doing because its wrong, but it seems like throwing out the baby with the bath water to say that an entire real estate strategy (a strategy that the founders of BP have talked about, given advice how to do and actually done it themselves) is unethical and should be made illegal.

@Steve K.   and the rest of you people. 

The damn article is titled, "the ultimate guide to real estate wholesaling." LOL...

On that same article, he went on to mention how wholesalers can actually be successful.  

He stated,

1. Find Great Deals

2. Drive For Dollars

3. Send Direct Mail etc

All methods that wholesalers use.

and he also goes on to explain the math on a wholesale deal. 

Also, I have both Joshua Dorkin's and  Brandon Turner's book. Both of them talk about how to legally wholesale and yes they do state that it's safer to get a license and that laws vary state by state.  Furthermore, there are, in fact, wholesalers who operate their business the wrong way. Yes, there are wholesalers with bad intentions but there's also snakes in every single industry. Do you REALLY want to have a conversation about law-abiding and ethics with me? Have you checked the not so ethical history of real estate lawmakers? I can go deeper than that but I won't.  I've said this once and I'll say it again, I've received kisses, hugs and gift cards for my services and will continue to use wholesaling as one of my exit strategies and pay my taxes.  There are thousands of professional wholesalers around the country who help families, provide for their own families, help investors feed their families and pay their taxes. I wish every single real estate wholesaler the best!

@Mary Mitchell I bought some golf clubs on Craigslist a few weeks ago from a guy for 65$. He couldve probably gotten 100 bucks if he would’ve waited a week or so. The thing is, the value of time and convenience was worth losing out on 30% of potential money. He didn’t want to waste time going back and forth with other people and their offers for a couple of weeks, constantly having to meet people and show them the clubs, only to have them walk away with no deal. He wanted them gone. The thing is, we live in a capitalist world and not communist China. People buy things and turn around and make money of them. I hope the next individual that buys a home from me, turns around and makes 50% profit. It’s not wrong, unfair or greedy, Its wonderful. its America, and it is a lovely country we live in. Im not a wholesaler, but I think they can provide a tremendous amount of value for the sellers that choose to go that route.

There’s usually a few reasons why a seller is going to even call you or schedule an appointment. One is, they dont want to go through the process of listing, they have a sense of urgency around needing funds right away, etc.  Dont ever feel like you are stealing equity from some one that reaches out wanting you to assist them in attaining funds quickly.  I am a licensed  agent and investor also. :-)

@Brittany Witt take a couple of contracts incase you make a mistake.  I use an app called TurboScan on my phone so I can scan the contract and email them a copy onsite and take the orignal. 

Wholesaling can be a win win win for everyone involved when you do it right.  You can solve a problem for the seller, and provide investors opportunities they wouldn't have on their own.  Best Wishes :)

I find it odd that a hard money lender would talk about taking advantage of people.  Wholesalers play a roll in real estate the same way hard money lenders do... when someone can't or doesn't want to sell or finance traditionally.  Most people aren't going to get their mortgages through a hard money lender (who one could argue guage people and rips them off) just like most people won't sign a contract with a wholesaler because they could get more money on the open market.  

they are stealing equity while they claim they are providing a service. Greed is the motivating factor.

@Mary Mitchell . I would say to try and look at it another way. While there are some bad apples out there most of us wholesaling are trying to help. A good wholesaler will be able to help get them cash for there property faster then they could list and sell themselves. Or get the seller more money by subject to, lease option, or rent to own ..etc

@Charlie MacPherson  some people would rather the guaranteed money now vs the hope that they'll receive the money in the future from a traditional sale.  Some people have to sell this second to a cash buyer with no way of listing it or selling it traditionally.  As was mentioned earlier, there is a price for speed and convenience that an investor offers.  Great for your client for being able to wait but some can't.  People at the end of the day are responsible for their own actions and doing their own due diligence.   

I will admit I haven't read every reply here since many were on point with the basics...so another example may have been given. But I often hear the excuse for unlicensed wholesaling that a property isn't MLS ready. Now hang on. I have a client with a somewhat stalled rehab in my area I have listed/withheld and am working through finding GCs for. Meanwhile, he owned a boarded up single family/illegal duplex junker in South Florida where he lives nearby but I'm 3 hrs north. It was the next rehab on the list, but after sitting awhile untouched he decided to sell it. He wasn't facing foreclosure or anything urgent, but wanted to liquidate the dead equity if he could at a break even or better. I tried to find a buyer or realtor to refer it to, but it had boarded up windows, a massive hole in the floor and one in the roof not much smaller and nobody local wanted to sell it. It was a good area but easily needed $75k+ in work. Guess where I sold it, under contract in under 3 weeks? Right on THE MLS! Not even my MLS, I paid a few hundred to join theirs. I listed it with some good pictures, I was honest in my description, and the seller met buyers to unboard the door and make sure they didn't fall through the floor. I had 8 offers in under 24 hours and the final price to get it was $9000 under list after closing a much larger gap in a bunch of back and forth. Thought it was a dead deal a few times, but we closed only a week after scheduled. In return for sellers involvement locally 3 hours from me, I listed at a discount and ended up crediting the buyer most of the buy side since they came to me directly. I made one trip to West Palm and fielded calls. I didn't make $15,000 like a wholesaler, in fact it was under $2k after buyer rebates to make it work. But the seller netted just about every dollar he had in it, the buyer got it at a price that made it a deal for the permitted duplex they planned and I didn't hear any of the 30+ Realtors and buyers I talked to tell me it didn't belong on the MLS. Oh and the seller was pretty happy with me for making it happen. I'll make it up on future transactions with him over time.

There is definitely a time and situation for a direct home buying offer and or net listing....but only by a licensed wholesaler in my opinion who is at least bound by state law. The MLS doesn't somehow ban distressed homes, you very simply disclose everything and the offers pour in...at least in my experience.

@Javonte Hardiman   I hope the best for you and your business, and I sincerely mean that. 

 My point is that along with teaching wholesaling techniques, BP also recommends being licensed or having your name on title so that you're not brokering without a license which is illegal, as Brandon Turner writes here in his blog post from 2015 titled "Is Wholesaling Illegal?". It's worth a read and I believe it's germane to this discussion: https://www.biggerpockets.com/renewsblog/2015/03/2...

@Steve K. There is a clause next to the wholesalers name that says, "and/or assigns."  That gives wholesalers equitable interest in the property and the right to assign their equitable interest. I do agree that it is safer to get a license which I plan on obtaining.  I also genuinely wish you the best in each of your endeavors as well. Thanks.

Originally posted by @Javonte Hardiman :

I wonder if @John Thedford and @Mary Mitchell and all other miserable haters realize that the owners of biggerpockets have used wholesaling as one of their exit strategies? Not only have they wholesaled themselves but they also teach it and BUY contracts from wholesalers.  I've heard both Joshua Dorkin and Brandon Turner say it on Podcast and in books.  If you didn't know, now you do. With that said, every second you continue your account on this website is a clear example of your hypocrisy.  BEAT IT!

First of all, I am not a hater. Or, perhaps I hate people being ripped off.  I would have zero problem with wholesaling if it wasnt for the fact that wholesalers are pocketing cash that should be in the sellers pocket - in most instances. 

How would you feel if it was your parents or grandparents being ripped off? 

As for the founders of BP pushing it - they are motivated by the same thing we all are - desire to make money. They are selling a website and side products. So they will promote what ever sells. And for some reason folks love the idea of wholesaling. 

Now, i hope everyone is successfu and makes as much money as they can - but i will continue to speak up when i see others being preyed on. 

Originally posted by @Jess White :
@Mary Mitchell I bought some golf clubs on Craigslist a few weeks ago from a guy for 65$. He couldve probably gotten 100 bucks if he would’ve waited a week or so. The thing is, the value of time and convenience was worth losing out on 30% of potential money. He didn’t want to waste time going back and forth with other people and their offers for a couple of weeks, constantly having to meet people and show them the clubs, only to have them walk away with no deal. He wanted them gone.

The thing is, we live in a capitalist world and not communist China. People buy things and turn around and make money of them. I hope the next individual that buys a home from me, turns around and makes 50% profit. It’s not wrong, unfair or greedy, Its wonderful. its America, and it is a lovely country we live in.

Im not a wholesaler, but I think they can provide a tremendous amount of value for the sellers that choose to go that route.

 Best comment by far!

Originally posted by @Scott Morris :

@Charlie MacPherson  some people would rather the guaranteed money now vs the hope that they'll receive the money in the future from a traditional sale.  Some people have to sell this second to a cash buyer with no way of listing it or selling it traditionally.  As was mentioned earlier, there is a price for speed and convenience that an investor offers.  Great for your client for being able to wait but some can't.  People at the end of the day are responsible for their own actions and doing their own due diligence.   

I have seen houses listed on the MLS one day and sold the next - cash sale. So it happens.

Originally posted by @Javonte Hardiman :
Originally posted by @Jess White:
@Mary Mitchell I bought some golf clubs on Craigslist a few weeks ago from a guy for 65$. He couldve probably gotten 100 bucks if he would’ve waited a week or so. The thing is, the value of time and convenience was worth losing out on 30% of potential money. He didn’t want to waste time going back and forth with other people and their offers for a couple of weeks, constantly having to meet people and show them the clubs, only to have them walk away with no deal. He wanted them gone.

The thing is, we live in a capitalist world and not communist China. People buy things and turn around and make money of them. I hope the next individual that buys a home from me, turns around and makes 50% profit. It’s not wrong, unfair or greedy, Its wonderful. its America, and it is a lovely country we live in.

Im not a wholesaler, but I think they can provide a tremendous amount of value for the sellers that choose to go that route.

 Best comment by far!

How so? Using Craigslist is like using the MLS - listing on the open market and letting the market decide the price.

@Jess White in your hypothetical if your selling to someone and they say to you “ here is all my proof that your property is worth x “ and then they walk out the door and sell it for double what they gave you for it.  How would you feel? 

@Mary Mitchell America is built from wholesaling. I've never seen people send gift cards after being ripped off. Wholesalers provide value, people who rip you provide false hope.  Furthermore, home sellers are well aware that you will make a profit from their property. You, mary, have wholesaled at least 100 times throughout the course of your life in some way. If you don't understand Jess white's comment, I have nothing more to say. 

Wish you the best. Goodnight. 

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