All Forum Posts by: Lydia R.

It will depend on the deal and the wholesaler. Off market and wholesale deals dont follow the same protocols as a traditional real estate transactions. Most of my buyers do their inspection after we are under contract. The reality of the situation is that usually the price is the price regardless of the results of the inspection. Your client might need to either bring a contractor with them to walk the property or look for on market deals instead where they have a lot more time to inspect and make a decision. Wholesalers are looking to find a buyer as quickly as possible and get the contract assigned and non refundable earnest money deposited ASAP. You can try and speak with the wholesaler about getting more time and they might give it to you but just be aware that as soon as someone is willing to sign their assignment and submit EMD that is the buyer they are going to go with.

 Wholesaling is a controversial topic. There are a lot of bad apples out there that make the rest of us guilty by association. Dont listen to that noise. Ive been wholesaling for almost 8 years. Do what you say youre going to do. If you tell the seller they are going to get $150,000 for their house then make sure they get $150,000 for their house. You did whats you said you were going to do. No one is going to even investigate your deal if you follow through. Its when you make promises you dont keep that people get pissed off and they have every right to be angry. 

Dont worry about this noise. Just keep doing what you are doing. Close this deal you have and then close 10 more! 

 I dont even know you and Im proud of you!! Good job for sticking to your guns and trusting your gut! If he was willing to offer 20K that means its worth a lot more. Great job. 

 Send me a PM! More than happy to connect you. 

 Im team Propstream, but Ive never used Privy. Ive been seeing it a lot lately. With a 30 day trial I would say at least give it a try and see what you think. Propstream only offers a 7 day trial. 

 It sounds like you have everything under control. Always stay mentally prepared for something to come out of left field. I had a situation once where we got to title and the seller found out there was an additional heir to the property that needed to sign the affidavit of heirship. It was an illegitimate child her husband had fathered and never told her about. Big wrench in an otherwise smooth transaction. Luckily this love child didnt want anything to do with the property and signed the affidavit and didnt ask for anything. But there was a heart stopping couple of days while the seller completely flipped out (she had no idea this kid existed). 

It sounds like you have everything going smoothly, just keep in contact with title to make sure everything is going smoothly and keep seller and buyer informed of the progress. I will have all my fingers crossed for you! Congrats on your first deal!! 

 You are totally getting scammed! Please see the other response I posted to your question. Do not do any of those things! This person is actively trying to screw you over.

 First of all, dont panic. Panic only clouds your judgement and causes you to make a rash decision instead of an informed, rational one. 

First thing you need to do is have a conversation with your title company. Ask them if they charge a fee for title work that is completed for deals that dont close. This is a common practice with smaller title companies. Obviously your preference should be to work with a title company that does not charge you if your deal falls apart. I mean, what if the reason the deal falls apart is the title not being clear? That would be a situation beyond your control. 
Second of all, you really should have a better understanding of the entire escrow and title process because otherwise you are at the mercy of those who are more well informed and you are also susceptible to those who dont know what the heck they are talking about but because you dont either you believe what they are saying. When I was in college the girl who lived in the dorm room next to mine truly believed she could not get pregnant if she was on the top. Because of gravity. Yeah....thats what happens when you are uninformed. Please dont be this girl. And Im sure it wont shock you to learn that she got pregnant second semester and dropped out. 

Let me give you a quick crash course in the title and escrow process. The title company is responsible for, among many things, examining the chain of title and making sure there are no title issues or mistakes or unpaid debts that are clouding the title and preventing the eventual buyer from receiving a clear and clean title report on the day of closing. The typically begin this process right away in order to meet the closing date deadline. EMD is refundable but only in the circumstances laid out within your contract. So you might want to pull it out and read what it says about EMD.

You absolutely do NOT have the right to terminate the contract because you could not find a buyer. That is not a valid reason for termination and if that is the reason you provide, you will most certainly lose your EMD. You should read what your contract says about termination. It should outline the valid reasons you can terminate, including the seller's inability to provide clear title and structural defects found within the property that were not disclosed prior to the contract. Again, without reading your contract I cannot tell you for certain what the termination options are.

From the little bit of background you've given, it sounds like this person is just trying to steal your deal. There is ABSOLUTELY no reason for you to assign the contract to their LLC if you already have it under contract. My best guess is that this is an experienced wholesaler who can clearly tell how green and new you are and they are trying to take full advantage. Unfortunately this is a sharkey business and this happens more often than it should. If I were you, I would completely cut off communication with this person because they are quite literally trying to steal your deal.

I have a friend/investor in VA and I trust her implicitly. I can put you in contact with her, she might be a buyer for your deal but if not she can at least give you an education on the actual process in your state so you know how things go and you wont be such a target in the future. Knowledge is power for sure! Send me a PM and I will put you in contact with my friend, her name is Natalie. Shes a sweetheart and she will be more than happy to help you. Sorry this is happening to you but you came to the right place to get advice!

 Speaking as a wholesaler and as an investor, I dont think your ethical dilemma is limited to wholesaling. The basic principle of investing is to buy at a discount. There is no difference between a wholesaler contracting a house and assigning it and an investor going to that same house and making the seller an offer. The investors objective is exactly the same as the wholesaler. Buy the property as cheaply as possible. 

You are making the assumption that every sellers objective is to get the most money from the sale of their house. I can tell you from personal experience (Ive been wholesaling full time for nearly 8 years) that there are situations where the seller is more concerned about something else other than how much money they are getting for the house. Ive had sellers call me 2 days before the foreclosure auction, desperate for a last minute solution. At that point they are out of options other than someone who can write a big check at a moments notice. And If I am the one writing that check, you better believe I want to be getting a great deal. I had a seller basically trade me their house for an RV because what he really wanted was to pack up his dog and a few pairs of underwear and drive across the country in an RV. He did not care about the money from the sale as much as he cared about cutting all his strings and feeling free. 

So when it comes to investing as a profession you have to ask yourself if you have what it takes to buy houses at a discount. You dont have to lie, you dont have to misrepresent or obfuscate but you do have to have the objective of making money, otherwise you just started a very expensive hobby. You also need to keep in mind that we dont make the messes that sellers find themselves in. We are simply the clean up crew. We come in and solve a problem that was not of our own making and we expect to get something out of it in return. 

You are going to have to make your peace with this if you are going to jump into the world of investing. You have complete autonomy over your own actions. You can choose to pass on a potential deal because you feel the seller could make more by listing the property or if there is a way to get them out of their financial difficulty and help them keep their home you are free to help them with that course of action. No one is forcing you to buy every deal. You can consult your conscience and your own moral compass and let that guide your decision making. 

This is probably not what you wanted to hear but Im going to tell you the truth. There is nothing you can do to prevent potential buyers from discovering this property is listed on MLS and you definitely cannot prevent them from contacting the listing agent directly and explaining what you are trying to do. Just for future reference, this is why wholesalers should stick to off market deals.

However, there are some ways to mitigate this situation.

1. You can tell the agent what your actual intentions are. This is a tricky situation because the agent is looking for a solid end buyer not a 'maybe I can find a buyer'. This would be a lot easier if you already had cash buyers you could call about the property. If you are going to go this route you need to project confidence and essentially convince the agent that you have buyer connections that they dont have access to and the value you bring to the table is that these buyers are well qualified and can close quickly. This might be a tough conversation to have now since the property is already under contract and I dont know what you told the agent to get to the point you're at now.

2. Work with buyers who dont mind paying a wholesale fee for a listed property. There are fewer of these buyers but they do exist. However you need to make sure these properties are priced BELOW the list price. If you are just adding a fee on top of a listing then you are not actually adding value. If I could go to Walmart and buy $30 comforters and then sell them on ebay for $100 then everyone would do this. There is a reason this strategy doesnt work. No one wants to pay more for something they know they can get for less. 

3. If you are truly convinced you have a deal on your hands--which means you have run the numbers multiple times and they tell you its a deal--then you can get a hard money loan to purchase the property and then you can resell it for a higher price. This strategy really only works if you've negotiated one heck of a deal because the costs that come with getting a hard money loan will eat into your profits. Its not worth doing for a deal you are only going to make 5K or 10K on. 

Good luck on this one. This is the reality of the risk when it comes to listed properties. The gurus make it sound so easy on TikTok and Youtube but they certainly arent willing to get on the phone and talk you through what to do when you get to this point. Another thing for you to consider, your end buyer is going to want to walk the property in person. How will you arrange that walk through without the seller or the agent realizing whats going on. These are some of the reasons Im not a fan of wholesalers trying to market MLS deals.