How do i go about a contract assignment if the home seller has a realtor?

I guess what I hear you saying in this matter is that the process of wholesaling is the same whether the property is listed with a realtor or not. Correct?

I say many properties here that are listed with realtors that may be a wholesale deal; however, what to do if the realtor and/or real estate company requires pre-qualification? This is where we run into a snag. We find great deals, however the agent always seems to say that we need pre-qualification before ending the phone call. What do we use for pre-qualification? Our credit is shot, 2 bankruptcies, yadayada,ect…We are on the up swing taking care of some things. Wanted to do wholesaling to pay off debt so that we could increase our credit lines and be approved for things.

Dan

Also, to my previous post, I might add, how do you assign bank owned properties? I didn’t think that was possible. However, according to TampaSteph, that is possible. We just have to do a double close. I am familiar with them only because I have been studying them.

Thank you very much Dan for your timely and effective info. Yea i found out a couple weeks ago you would need to double close a bank owned property. For realtors i wont have to deal with them because im just doing FSBO’S its less of a headache for me. for assignments i thought i would have to do a title search but someone told me a real investor will do his own homework on the property.

so what im going to go find the homes, run comps find arv then get the lowest possible price put it under contract, and market it to my buyers list of only nine buyers lol. but i know what they want and where they want it so someone will buy it.

Thank you

thank you everyone who read and replied to my post im am more educated now in wholesaling than i ever was.

Thank you you all :beer

PradaP,

I’m with you on the FSBO’s (don’t know what part of the country you’re located in) however, in my correspondence with FSBO’s they’re very “tight” with the money…even though their ad for their house may say “negotiable” my experience has been that they pretty much want full Retail and they don’t want to budge much (guess they aren’t MOTIVATED enough at this point). Going in, we already know they don’t want to pay the 6% realtor fee, or any split on it, much less any concessions…any suggestions on this? OR, do I wait a little longer till they become More MOTIVATED? Thanx ~ John :beer

Also I get good info from my local newspaper website. There I can find recent sales, tax records showing what the house is worth and a nice foreclosure list etc…

i 100% agree with frank i always do that and waiting on someoe is somewhat good but letting them think on your offer as you do others well make the wait seem shorter. depending on the how long the house sits on the market will determine how long you will wait on the offer being accepted.

Prada P :beer

wholesaling is the best way to get started in real estate with less risk. like i tell myself NOMORE excuses get the money and get to the next deal ASAP.

Prada P :beer

If it is listed by a Realtor, you could very well have a pain in the ass if you deal directly with the Seller. If you have a legit buyer, then just tell the Realtor and you might be able to get them to split a % of the commission with you (It is their legal right to collect the commission then pay you. They will just 1099 you for that amount so they are not taxed on what they pay you and you can invoice them).

Might make the structure a little easier to achieve.

In my experience, at some point you are going to have to deal with the listing agent, who legally is the gateway to the Seller, so better to get it out of the way.

YES they do have the power to do 2 things:

  1. Interfere with the closing if they are not paid, and
  2. Sue the Seller later if they are not paid based on the contract terms that they have with the Seller.

One thing you might do is discuss (carefully) the Seller exempting himself from the Exclusive Marketing Agreement by writing it in the special conditions section of the Agreement with the Realtor. The logic to the Seller being, the Realtor didn’t procure you as the buyer.

I do not advise cutting out agents though (ask me how I know this :argue been there, done that)

Why not go after recently expired listings? :biggrin

Great job, keep it up!

Experienced Wholesaler - I am sorry to say that, but you are way, way off… :O) A Realtor cannot split commission with an unlicensed person. Any Realtor knows about this and actually this is probably one of the negatives about being a realtor - you can’t offer a commission or a bonus to anyone that brings you a deal… :O(

A regular investor can put out fliers stating that he will give $500 or $1,000 to anyone that brings him a deal. If that investor was a Realtor, he would not be allowed to do that… :O(

And even if you could find one that would take the risk and split the commission with you, he would need to do that under the table - he would never be able to give you a 1099…

Have a good Sunday!

I appreciate the correction on that topic.

I may be wrong about that, and I will double check my sources.

I agree, the straightforward way you explained it would not be the way to do it. I am not advocating doing anything that is prohibited, and there is often a legal way to do things but that always depends on your advisers.

Experienced Wholesaler - I am sorry to say that, but you are way, way off... :O) A Realtor [b]cannot[/b] split commission with an unlicensed person. Any Realtor knows about this and actually this is probably one of the negatives about being a realtor - you can't offer a commission or a bonus to anyone that brings you a deal... :O(

And even if you could find one that would take the risk and split the commission with you, he would need to do that under the table - he would never be able to give you a 1099…


However, I have a colleague who has had a relationship with an agent such that he has been paid a fee for services that has been structured, with the help of his accountant, so that it is completely legal and deductible as an expense.

I think it comes down to how the agent’s business is corporately structured.

Again, this particular point isn’t one of my areas of expertise, and I will admit it, but I know that if you have the right structure you have some flexibility.

Thanks for the clarification, again, I will double check into HOW it has been done.

Continued success! :biggrin

thanks guys, expericend wholesaler i have one question, is it legal to do the procedure to cut the agent out i mean how do i do that. without a legal mess up tell me more about cutting the agent out?

Thank you :beer

PradaP - are you sure you want to do this? What about the Golden Rule? How would you feel if you were the realtor and someone was trying to cut you out of the deal? No deal is worth your peace… :O)

Just my 2 cents. Have a nice evening!

whats the deal with reo not excepting assignments. everybody gets what they want don’t they? i contacted an agent here and he said the same thing. are there ways around rejection from realtors?

htjohnson - realtors can’t reject an offer. They are agents, not principals. Only the principal can accept or reject an offer. There is one exception to this rule, but it is not relevant for the discussion.

What I believe happens most of the time is that we talk with the realtors on the phone and ask if the bank would accept an assignment, or if the bank would accept a contingency, or if the bank would accept this much… The realtor tells you NO and you feel your offer was rejected…

One thing though you need to realize is that noone rejected your offer, because there was no offer. Until you put it in writing and send it in, there is no offer. My suggestion is to write it down and send it in. The realtor will be required to present the offer to the bank (again - there is one exception) and then it is up to the bank to accept or reject.

My suggestion to you - put your offer in writing and send it in. If the realtor comes back saying that the bank would not accept it, than politely thank him for his insight but insist that your offer be presented anyway. The realtor is required to present the offer.

You will be amazed on how different some people react to offers in writing. Some people will tell you no over the phone, but end up accepting it if you put it in writing… At least this is my experience with negotiations (not real estate related…).

Good luck!

Prada P, I must agree with J1dias, I do not agree with going around an agent on a deal.

Honestly, just pay the people in the deal.
However, be a smart negotiator.

After several years filled with experiences of deals that have gone haywire because someone was cut out of a deal, I have come to the point where I see how the business works better when people are making money. Getting cut out of a deal has caused angry, even violent reactions from other parties who feel entitled.

[b]Do I know how to legally cut out Realtors, other investors, and anyone else in my way??

YES!!

Would I??

NO!!
[/b]
It’s bad business, bad for the industry.

When it happens to you (like it happened to me) you see that that kind of unethical behavior makes it hard for EVERYONE to make money.

Here’s an idea:
Learn how to negotiate with the Realtor for a flat fee, or something in your favor.
If you are bringing the buyer, you can have a reasonable cause to help the Realtor see the advantage of working with you in a way that makes you feel satisfied.

Also, why not wait till it’s expired…

i want to thank both of you for your response i would like to know how to cutt a realtor out of the deal? just incase i need to because i want to know how to be the middle man or cutt out the middle man.

Thank you :beer

I am a Realtor in AZ, and I’ve submitted numerous REO offers on behalf of a wholesaler client of mine. Of the 20-30 offers we’ve made, only 1 bank has come back and said they would not allow the contract to be assigned. So, I would definitely make offers on REO’s with an assignment clause. The worst that can happen is they reject your offer.

:coolthe best way is to pay everyone invovled because i do believe in Karma but i just wanted to how becaus i didnt know thta you actually could.