HE LIED TO HIS BUYER

Bird Dogs, Wholesaling
1

I got this trashed house on Contract for 30K and sold it in less than 24 hours for $50,000
My bird dog is an insurance adjuster and this lady filed a claim on the damage her renters did to the place. Her claim was denied and she told the bird dog she just wanted to get rid of it.

On this deal I did all the negotiating and met the lady a few weeks ago and offered $26,000 and took some photos, in the 3-4 weeks that followed I wud call her every week and ask if she was ready to sell. Finaly a few days ago she calls me and tells me that a realtor told her the house would be worth 100 Grand fixed up. and she called someone that told her not to sell for less than 35K and not to take anything less than 32K and also that her grandson was going to help her fix the place up and then says, I’m not to sure about how that will work out.

I told her I’m taking a big risk here, because the house needs so much in repairs. I tell her I can do 30K no more. She says if u can do the 30 I will accept that offer.

I sent the contract to the Finder cuz he lives in that town, it’s about an hour away from me, and he went over and got it signed the very next day.

Then I txted a buyer that had been hounding me to find some properties for him, he had looked at a few that I had for sale b4. I told him he could have it for 45K and I was giving him first shot. In a few hours he sent a txt back that he would take it for the 45K as agreed.

I thought oh no, he said yes way too fast.

Wen he calls I tell him I want to sell it for the 45 as our agreement but my partner wants to hold out for our asking price of $52,500 because were getting a lot of calls and we got a half dozen investors going to see the place.

10 minutes later he calls back and asks, will ur partner be happy with 50K?

I said yea, I think he will.

That lie got us an exta $2500 each.

Is that unethical to lie to my buyers like that?

What would you have done?

2

Do you honestly need feedback here?

Is tearing up your reputation as an honest operator worth $2500?

Giving a reliable buyer first right of refusal, and then working him over once he’s accepted your price, is just so unprofessional and short-sighted, if not reputation-damaging, I’m not sure what would be.

I hardly think you need advice on this. If you made a mistake in pricing, then YOU made a mistake. Otherwise, the buyer made a mistake by not putting a fuse on his acceptance of your offer, and then liening your property until you decided to close with him.

You can burn a half-dozen buyers this way, and then your reputation is pretty much toast.

Frankly, there’s some sophisticated buyers out there that will deliberately screw you for doing this crap to them, or to someone they know. This is a small community of investors.

They might decide to lien your deal, and then sit, and not perform, or begin renegotiating the purchase price just for giggles, while you’re all tied up, and unable to do anything else in the meantime. I mean who are you going to sell to, after you’ve got a clouded title?

Meantime again, you’re tied up for weeks on end, and the buyer is deliberately not closing. He’ll just wait, and/or suggest you buy him out of the deal. This way he ‘wins’ for ‘not buying.’

Will the short term gain be worth the loss of good will? How about your reputation? Just asking.

Never mind if you don’t offer a buy-out to the buyer.

He’ll just wait and just before you go to court, trying to remove his legitimate lien (in four months), he’ll offer to remove the lien for a small settlement fee.

Of course, you have a situation with an angry owner, whom discovers his title has been clouded by a 3rd party you’ve contracted with, which makes it impossible for him to sell to anyone without some stranger’s cooperation.

Don’t go down that road. That’s my feedback.

3

One of my hobbies is studying human behavior.

Its so facinating how people can justify anything.

You can steal a mans wife because, he wasnt good to her.

You can steal another mans money cuz, I need it more than him and he has plenty.

Even murder, the ultimate justification, the guy deserved to die.

I can justify a little white lie to get more profits, cuz it’s done in business every day.

Then why do I feel so bad about doing it?

Because, I know it’s wrong.

4

I know we are not talking religion but I see a lot of just good human nature in the things said in The Bible. One thing it says is that we are not to gleen the field. Meaning that you should not try to make every last penny but leave some so that all can gain from your ventures.

Real estate is not a zero sum game. It is a prime example of the abundance principle. The more you make the more everybody makes. You should build a reputation where everybody is clamoring to do business with you.

5

This situation sort of fixed itself.
The buyer calls and said he ran his numbers and the margins were just too tight.
I asked, did you want out of this deal? He says we still want the house if we can get it for 40K
I called him back later and told him we can do 44K… He says ,That will work.
Were getting less money, but I feel better about everything.

6

I guess it comes down to what you believe. I personally believe in karma. So in this case I would probably not have done that thinking that somewhere down the road the situation could be reversed and I could be the one taking it on the chin.

If you feel what you did was right and no one got hurt then move on and don’t make a habit of it…

7

Sounds like an episode of real estate new york.