Need A Little Advice Please!

As a wholesaler I put a house under contract (through a realtor) and then placed a “Handyman Special” ad and got quite a few responses. Here’s what happened: An interested party called and said he was interested in the property and asked if I had some pictures. I told I did and emailed them to him. He then called back and said he wanted to see the property. I told him I needed to coordinate the showing with the realtor as I just have it under contract but I don’t actually own it yet. We coordinated a showing at the property(with the realtor in toe) and when I got there, he was already inside the property with the realtor and door was locked. I knocked on the door and instead of realtor answering it, my interested party answered the door which seemed kind of strange. He spoke with the realtor outside for a minute and them came inside to where I was waiting. He asked what I wanted for the house(the ad indicated that already) and then proceeded to tell me that he felt I was committing some type of fraud by saying that I didn’t actually own the house so why am I selling it? The realtor also told me that she has never heard of a double close or simultaneous closing and that my transaction with her has to be completely closed upon first before my transaction with another buyer(handyman) could take place. Anyway, since I am relatively new at this and my prospect was threatening me with police action, said he would notify the Real Estate Commission on me etc I panicked and back out on the deal with my realtor. Here is my question: Was he just trying to scare me or try to make me give up the property so he could have it for himself? I would appreciate anyone’s feedback. I’m plugging along and not giving up but I’d like some suggestions on how to deal with this type of situation should I be faced with it again. Thanks very much for all of your help!

Was this a real-estate agent or broker?
Why would they sign a contract with you if they were not familiar with the transaction? :shocked
The agent/broker is bound to represent you, not the buyer?
Are you a licensed agent/broker?
The police “in my opinion” would do nothing :flush

Well that was my question, who did the REALTOR work for. I would suggest using a REALTOR yourself, find one with a CRS or GRI designation. They are more educated and have more experience. It also sounds like there is some funny dealings going on with the Agent and that handyman.

Thanks in advance for your input. I just wanted to clarify that I enlisted the help of this realtor to help me find fixers. She sends me MLS listings from time to time to consider. The property I reference to above was on her MLS listings and I decided to check it out as a possible prospect for my whole deal. I called her about it. She showed me the property and I decided to put an offer on it. The offer was accepted and I put it under contract with her. When I got to house to show my prospective buyer(from my list)around that when things started unraveling. He basically acted as if he owned the whole show and my realtor went along with him. He spoke to her first privately as stated already above and then he spouted off at me while she(the realtor) just stood there. The only contributing comment she made to me was that I could not sell the house to another party until my deal with her was closed upon. My question is how do construct a wholesale deal where I put the property under contract, get my buyer from my list in the property, get him or her to sign a purchase agreement to get the property from me, profit between the two deals, when their is a realtor in the picture who doesn’t under the process? How do I prevent this from happening again?

What do you mean by a CRS or a GRI designation? And what is the main difference between a real estate agent and a real estate broker and how is one beneficial to me over the other. Thanks in advance for your input.

If the Realtor was your buyer’s agent, then the Realtor works for you. If the Realtor was the listing agent, which does not appear to be the case, then the Realtor works for the seller.

This is, in my opinion, one of the complications of trying to wholesale listed properties. When there are Realtors involved, there’s a certain amount of formality that must be followed.

If you tell 100 average agents that you plan to assign any contract that you enter into, I bet 99 of them will look at you like you just landed from Mars. They will also be concerned that somehow they are getting involved in a questionable transaction.

Long story short, the Realtor seems to have struck a deal with the new buyer, and the new buyer was not happy to hear that you had the property under contract for less and that you were making a profit. (What was your margin here?)

It’s a very dicey thing to offer for sale a listed property that you only have under contract. I am sure there are some states where that’s illegal as you don’t have enough of an equitable interest to offer the property or show it.

I think you should have been more up front with the end buyer that you’re a wholesaler who has the property under contract. If he balks, let him go. He’s not sophisticated enough about this industry to get it. If he tries to muscle you, just advise that you have the property under contract and you are prepared to close, if necessary. If he does not want the property at the agreed price, then part company and let him get on down the road.

The police have no say in the matter. It’s a contract issue.

The bottom line here, at least the way I see it, is that it’s very tough to juggle all the aspect of wholesaling listed property unless you actually close on it before re-marketing it.

PaulBroni is right, 99% of the agents are not familiar with investment strategies, wholesale, flipping, etc. This is not part of the licensing process nor taught in the office. It is up to the agent to educate themselves about this if they plan on dealing with investment properties. My opinion is you should fire the Agent. The agent is not educated enough to know what you are trying to accomplish to represent you in the best light. This is not to say your agent is a bad agent, she is just not the right match for you. You should have a lawyer as part of your team as well, I would have your agent and lawyer in touch as well. Here is a link from NAR explaining all designations [url=][/url]

The difference between a broker and an agent 1) further licensing and education requirements. 2) every office has to have a broker of record, the broker of record for that office is the person of ultimate resposiblity. It’s like a parent of a minor. If the agent does ANYTHING wrong in your transaction, the broker is liable as if he did it him/herself. All agents report to a broker, this is a requirement by law.

Another point to add to this is always make sure you are using a REALTOR vs an agent. And always check the license status for disciplinary action from the department of real estate. Because of the last 5 yrs of real estate boom, there have been many people practicing real estate sales without a license.

I just realized you have purchased the property using that Real Estate Agent. So firing your agent may not be an option at this point. I would speak talk to her employing Broker of Record for that office and connect get your attorney in the loop as well. What you are doing is legal, but that agent is just not educated on wholesale dealings

Thank you! Thank you! Thank you! to all of you who responded so helpfully to my situation. I am very touched that so many of you took the time to offer me so much advise! I have an appointment Monday afternoon with a Real Estate Attorney and will let all of you know how it goes. We still have lots of questions but feel so much better after reading all of your responses. Thanks again for being there! Will chime in again on Monday night. Have a great rest of your weekend!

good feedback from Paul and gypsy…

gypsy…what’s the difference between a realtor and a licensed agent?

good luck fixers…hope everything turns out well on Monday…

A Realtor is an agent who has joined the Realtors’ association (National Association of Realtors). A Realtor has agreed to run his or her business under all of the guidelines and the code of conduct issued by the association. An “agent” has not.

Now, that is not to say that someone who is a Realtor is inherently “better” than a non-Realtor. There are going to be Realtors who are still shifty regardless of the designation, just as there are going to be agents who can serve you very, very well even though they are not Realtors.

I would suggest placing more weight in references and overall impression than a designation, but that’s just me.