All Forum Posts by: Dustin P.

In a hot market, it's going to make your offer more competitive.

I don't think anyone would advocate for doing no due diligence. There's a difference between that and not having a due diligence period in the contract where you can cancel and get your earnest money back.

There's nothing preventing you from doing your due diligence before making the offer, and then foregoing the due diligence / inspection period. You may run the risk of the seller accepting another offer before you finish your due diligence and may be out those inspection fees and your time, but that's about it.

It's an effective way for a seller or seller's agent to weed out the BS offers and pick from the serious ones. I know more than a couple agents that will advise their sellers to only take offers with $10k earnest money and zero contingencies if it's a fixer upper / investor listing

The more familiar you are with your market and houses in those markets the faster you'll be able to comp those properties and also estimate costs for things

@Bill F. Let's not try to pretend like this thread wasn't derailed by the second post on the first page

And you only have one person here calling people scabs that I can see.

 That's my biggest issue with them. When I make an offer for a house similar to what you've said and my offer is $240k, I try to explain to them that the Opendoor offer of $300k is really going to be $243k after it's all said and done anyway. They just aren't going to be upfront about it.

I do see people being more and more educated about it though. I don't think they are breaking any rules. I can make an offer on the MLS for 300k and then request 30k in repairs at the end of my inspection period too and I wouldn't be breaking any rules. But you do wind up with a lot of pissed off people

I think you have to look at each market separately and then ask yourself, is this a deal in this current market? People have been saying we are at the top for years. Do you want to wait 5 more years just to find out that this isn't really the top? That's up for you to decide.

If you buy a property that will cash flow though I don't think you have much to worry about. If population, job growth, etc. is strong and the market has a correction that forces some buyers out of the market, those buyers still need a place to rent. You'll see more of a demand for rentals and increased rent prices.

I think Phoenix for example right now isn't as frenzied as it was. It's still a seller's market, but you are seeing higher days on market in certain areas where people are asking for top dollar. Rents have exploded though, rentals are off the market within days with multiple applications. When running rent comps you almost have to use the active if it's less than a week on market because that's pretty much your comp. 

Oh definitely, I put back-up offers in on the MLS all the time. Rarely is my offer the first one accepted, usually it falls out 2 or 3 times beforehand. But I don't think that's what James was talking about, he was talking about circumventing the person altogether and trying to back door the deal.

I agree, if laws were black and white and easy then there would be no lawyers. So if the Arizona statues say that no licensed person can receive a fee from a real estate transaction, just like it says you cannot drive 51 mph in a 50 mph zone, I'm willing to bet that there are nuances to that law. But again, I would just ask a real estate attorney if I'm an unlicensed person trying to buy and then resell properties.

Or just get your license. More access to deals, access to comps, networking with other agents, the ability to list the property if they don't want to sell it cash, etc.

 Ironically I'm doing my CE right now and it says right there, do not presume to give legal, accounting, insurance, etc. advice, refer to them to a professional!

Hey Jay,

Back-up offers on the MLS are one thing, but that's not what we are talking about here. We are talking about going to a seller that is already under contract off market. Maybe it's ok, if you approach and say hey I just want to put a back-up offer in case your current offer falls through. Depending on what you say though, like if you say "Hey, you're under contract for $140k? Ok I'll pay you $145k" you may be walking the line of tortious interference of a contract

Again, we are talking about if someone has legitimate means and intent to cash close a property, not talking about people tying the property up just to assign with no intent of closing.

I know a wholesaler that closes properties all the time. When he buys in Sun City though he gets hit with about $4000 in capital improvement fees every time he closes, so in those instances he assigns. So just because someone is assigning a contract does not mean they do not intend to close. If the sellers absolutely refuse to let him assign it then he just closes it, no big deal.

 So let's say they were a licensed individual. They knew you liked properties in that area. They got a great deal on a property - One they fully intended on closing (They had plenty of clash) but would be ok with making a quick profit on it. To save on closing costs of having to do a double close, they reached out to you, and said they do have the ability to assign the contract. If not, no biggy, they'd just close on it and do whatever they wanted as the new owner.

Is there an issue?

@James Wise

I don't understand how it seems like every post like this seems to degenerate to name calling ("scabs" whatever that is, doesn't sound nice) and that the thread is typically derailed. If wholesaling, or buying and then immediately reselling properties, was not ethical, why would Bigger Pockets have an entire sub-forum dedicated to it? Maybe your beef should be with them to remove it?

Also, I didn't like the idea that if someone had a property under contract that you were interested in that you would just try to cut them out and go directly to the seller. That's shady in my opinion. Especially if that person has a contract that they are capable of closing and plan on closing.

I like @Michael Ealy's taken on it personally, that closely mirrors how I feel about it. The grey area stuff I would advice people to just speak with a real estate attorney.

@James Wise I guess in that instance if I were an unlicensed individual looking to do that I would probably seek legal counsel from a real estate attorney here locally

Well, I wouldn't, I would just get my license, but one might