Trying to Wholesaling a property that is listed by an agent?

21 Replies

That is a tricky one but can be done. How is it structured exactly? Are you going to put in it contract and have a buyer ready to buy it for more from you? You will either need to wait for the realtors contract to expire with the seller or contact the realtor and work a deal. The realtor will and in my opinion deserves to be paid for their time. 

A smart agent will ask for proof of funds. Why not get licensed? Then you can get a co-brokering fee without the hassles of trying to work as an unlicensed broker.

Wholesaling is simply the assignment of a contract so you need to get the property under contract first by going through the realtor then you can assign it to the end buyer.

Keep in mind that with a listed property you will need an earnest money deposit and most will require proof of funds or pre-qualification letter from a lender before they will review the offer.

Originally posted by @Lisa Leary :

Can I Wholesale a property if it’s listed by a agent? If so.. How do I go about it?! Thank you in advance to anyone who responds to this post!!!

just have an assignable purchase contract signed by the seller, leave plenty of time for inspections and other contingencies then try to sell it .. The only problem a smart agent would warn his seller of an assignable contract ,also if you do not have proof of funds or a loan commitment it would be hard to have your contract signed.

 

Why not offer the agent a part of your fee as you wholesale it. If they are getting a percentage of the sale and you add a few thousand after completion they maybe willing to not only work with you but also send to you pocket listings that they are unable to sell knowing you will give them a cut of the pie. And even more you have just started a solid working relationship.

@Lisa Leary ,

The power in wholesaling is finding off-market deals. I don’t know how you came by this property, so I’m not speaking to it specifically, but I would suggest focusing your efforts on finding those off-market deals and not look to active listings.

@Oliver Perry

Not sure that’s legal.

@lisa

Also, if it's listed on the open market now why do you think you'd be able to sell it for more? I would think a very very high percentage of investors that buy from wholesalers are also checking the MLS. May not be the best use of time and talents.

Good luck. A good agent will not allow their seller to be put through the wringer by a wholesaler. Youll have more luck targeting unrepresented, uninformed sellers.

I've been lurking on this forum long enough to know John Thedford has some great wholesaler stories. Maybe he will share some and hopefully change your mind on your career path

This is the cringiest post I think I've ever seen on this site. Most replies are a wreck. Let's start to fix it:

@Lisa Leary I hate to answer a question with a question, but why do you think it will be any different than any other wholesale? What do you think would change with an agent involved? A buyer pays the seller money for their property, and the seller is contractually required to give a % to their agent. 

@Jon Schoeller same question to you, why do you think the agent needs to be removed? My listing agreement has a "protection period" which will not allow you to end your relationship with your agent and then sell to someone else the next day. I assume these are fairly standard. 

@Oliver Perry As another has said, probably illegal or it should be. NO. Just... no.

@Lenny Marquez what state are you in??? I'll get my license there this weekend, just hold on! We are agreed on 12% listing fee yeah? LOL

@Austin Ghassan the co-brokering fee is the commission promised to the buyer's agent. As an example if the seller is paying a 6% commission, 3% is going to their agent, and the other 3% is going to the agent that represents the buyer. Of course that would be giving it away, right Lenny? haha!

I upvoted for those who added some sense to this conversation  :)

@Lisa Leary nope my advise was bad. and that's my fault my apologies. I talked to a realtor friend and you wouldn't be a able to get a fee. the property to come off of the MLS and not be under a contract with the agent. Shout out @josh C. and

@Lenny Marquez , for teaching instead of chastising. Thank you guys for the lesson, learn something new every day. 

@Eddie Egelston I didn't say you HAD to remove the realtor. In fact I said they should be paid. But you aren't going to be able to put in in contract and sell it without them involved while they are still the listing agent. So you either have to wait until that contract expires or pay them. Well I guess you don't have to but I don't think that is right. 

Originally posted by @Austin Ghassan :

@John Thedford what is the co-brokering fee?

That is where an agent brings a buyer. The property is listed by one agent and sold by another. They split the commission. 

@Lisa Leary There are a couple difficulties that come with trying to wholesale a property that is listed with an agent.

1. Agent is going to want to see proof of funds prior to seller entering into purchase agreement with you. You cannot use your end buyers POF because you are entering into the contract with the seller and then assigning to the buyer.

2. Agent will require EMD. This isnt a difficulty if you have the funds to put up, but if not then it becomes a hurdle you must overcome.

3. Agent is most likely not going to accept any of the standard “wholesaler” clauses. So you better be sure you can find a buyer or that you have the capital to purchase the property if you cannot locate a buyer prior to closing

4. The ethical thing to do is to inform the agent that you are assigning the contract (unless you are going to double close) and most agents will not be ok with it

5. Unless you are getting the property under contract for significantly less than the list price, why would an investor pay you a wholesale fee to find a property they could’ve put in an offer on themselves? If I sell you a pair of shoes from the mall for $50 more than what you wouldve paid had you gone to the mall you would probably be a bit unhappy about that.

In my opinion, listed properties are a no no for wholesale deals. Off market properties are how wholesalers earn their wholesale fee. Anyone can make offers on listed properties.

@Lisa Leary you should really consider what value you bring to this transaction. The buyer could work directly with the sellers agent. It may be better to just refer the buyer. I realize you don't get paid, but you do gain a relationship with the buyer, which can be valuable in the future when you find off market deals. 

I know others are saying there is a way to do this, but this ignores the fact that not all deals are worth doing. There is many barriers here and it is just not the best place to spend your time.