Working with a Real Estate Agent

16 Replies

I’m a new wholesale investor. I have a question for the group. I have a Real Estate agent in Austin, TX trying to get me to Wholesale a house in Dallas, TX. The RE Agent does business in both Austin and Dallas. Why would she need my help.

The house has been completely renovated and the neighborhood is decent. To my understanding there’s absolutely nothing wrong with the house. She says the house is her dads house and his reason for selling is personal.

According to DCAD (tax assessors office) her dad just bought the house this year. And has recently renovated it.

She’s asking for $100 option fee

$1000 earnest money and Proof of Funds Letter

I have nothing but her word that her dad is even trying to sale the home. But nonetheless she’s a RE Agent and has other homes listed in the Dallas area. Why would a RE Agent that has houses listed need a wholesalers help with getting a Buyer.

Based off of a previous conversation I’m having trust issues with this deal especially because I think she’s trying to get my Buyer’s information.

What’s your take on it. Am I being paranoid or does this deal sound fishy

@Yolanda Eiland - yes, it does sound fishy. There's nothing wrong with an investor-friendly real estate agent you can work with to wholesale a home, but your clients are likely looking for a value-add property. If her dad purchased the home this year and fully renovated it, his best chance to maximize profit is to list on the MLS and get every possible interested person to preview the house.

That said, make an offer that's a good amount below fair market....that might help sniff out what's going on.

@Tchaka Owen thanks a lot. They did accept my offer. I’m waiting on the father to sign the contract. Because I am new to this I wasn’t sure if this something that’s normal for real estate agents or not. But I’m glad that you explained it it makes sense. 

Originally posted by @Yolanda Eiland :

@Tchaka Owen thanks a lot. They did accept my offer. I’m waiting on the father to sign the contract. Because I am new to this I wasn’t sure if this something that’s normal for real estate agents or not. But I’m glad that you explained it it makes sense. 

That doesn't mean anything. I can send 100 offers and get them all accepted. What you need to know is how your offer compares with FMV. That delta is where you stand to make profit. If you're at fair market, save time and cancel immediately.

Originally posted by @Yolanda Eiland :

I’m a new wholesale investor. I have a question for the group. I have a Real Estate agent in Austin, TX trying to get me to Wholesale a house in Dallas, TX. The RE Agent does business in both Austin and Dallas. Why would she need my help.

The house has been completely renovated and the neighborhood is decent. To my understanding there’s absolutely nothing wrong with the house. She says the house is her dads house and his reason for selling is personal.

According to DCAD (tax assessors office) her dad just bought the house this year. And has recently renovated it.

She’s asking for $100 option fee

$1000 earnest money and Proof of Funds Letter

I have nothing but her word that her dad is even trying to sale the home. But nonetheless she’s a RE Agent and has other homes listed in the Dallas area. Why would a RE Agent that has houses listed need a wholesalers help with getting a Buyer.

Based off of a previous conversation I’m having trust issues with this deal especially because I think she’s trying to get my Buyer’s information.

What’s your take on it. Am I being paranoid or does this deal sound fishy 

 The fees sound appropriate.  guessing the house is $100-200k.

$100 option fee is usually written to the seller.  Did you get a 10 day option?  you can pull out of the deal for any reason if you cancel the contract before the option period is over.

However the escrow fee should go to the Title company in the name of the title company.  NOT to the seller or the sellers agent.

Be a little careful, there have been some scam artists working in Dallas that will list properties well below value and "sell" properties that they don't own.  Going thru a legitimate title company will protect you from those issues.

As far as wholesaling vs putting it on the MLS. It might be a case where the property is in bad enough shape that getting financing could be a problem. Also sometimes you get individuals who are embarrassed about their house or their living condition and don't want individuals coming in to look at the house.

Most of the wholesalers I see in Dallas are asking for $5,000 earnest that goes hard from day one with no option period, and are expecting all cash offers to play.  They are also using their own title company.

I am a little confused about what the realtor is trying to accomplish, maybe to avoid paying a broker? (which isn't ethical)


Here is the thing at a higher level, if you are uncomfortable with the ethics of the seller or the real estate agent, isn't that enough of a red flag to walk away?  Here is the thing for us, our goal is to build slowly and ethically.  IF we don't feel comfortable with an agent, or a seller or a transaction, we will just walk away. 

There isnt a deal on the planet we would do with someone who we felt was unethical, real estate is a long game, almost no one gets rich on one deal.  I don't want to be associated with people who are unethical and the risk reward of dealing with someone who doesn't seem on the up and up isnt worth it imo.

@Bart H. thanks. I think I’m going to take your advice and pass on this deal because something isn’t right. The house is vacant and completely remolded. So I’m a little confused by the Real Estate Agent. She sent me the Contract requesting proof of funds from a Buyer. I’m not sure why a Proof of Funds is needed when there’s an option fee and earnest money involved. 

@Yolanda Eiland Something is definitely fishy. No experienced realtor would go to a wholesaler to sell their relatives fully renovated property, in another city. This person is either a wholesaler themselves or there is something wrong with the property (did the rehab but didnt get permits, structural problems discovered during rehab etc) and they are trying to make it someone else's problem. There is nothing wrong with wanting a proof of funds or an EMD and option fee, that part isnt the red flag. The red flag is definitely that the realtor is asking you to wholesale a rehabbed property instead of putting it on the market (or even just a FSBO on Zillow) to get the highest possible price. Whenever something seems too good to be true it probably is. Run far and fast from this one, its most likely a scam.

@Yolanda Eiland I agree that there are a lot of red flags. 

The fact that the seller's daughter is an agent working in the sale location where the house is sounds off. Why isn't it listed on MLS? That's always the best way to get the most money for a property.

That suggests that either there's something major wrong - as others have said, not pulling permits, hidden major defects, title issues, etc.

The other possibility is he financed with hard money and has a balloon payment bearing down on him.

Before walking away, I'd have a conversation with the agent/daughter.  Tell her that there are too many things that concern you and you need the entire truth before moving forward. 

If she comes clean, you might have a good deal.  If not, walk away.

@Yolanda Eiland . Here’s the challenge, if you don’t have a mentor to help you navigate these first few deals you can see yourself potentially getting in some hot water. As mentioned, go have a conversation with both they seller and the agent and get the whole truth. This is where a mentor would guide you and attend this meeting with you.

@Lydia T. is an honest hard working wholesaler in Dallas and as she offered above, she can be a great resource.

You got this!

@Yolanda Eiland ..Couple things..Verify the repairs needed. If may be something that prohibits her from listing it on the MLS. You will also get to the point in the deal where you have to meet her dad ( signature purposes on the contract)...Have a list of questions ready for him BEFORE you all sign. Lastly, If you havnt already, You need to establish a better reported, a better relationship with your buyers. There will ALWAYS be wolves coming for your food, Buyers in this case...If they understand the you do good, fast and profitable business, That YOU make them consistent money, they will learn YOUR value and thus, turn down alot of the sort term, flashy money.....