Realtors butting in on wholesale deal

A seller called me from a letter I sent him after driving around finding ugly houses. This house is UGLY with a capital U. It is a fire damage house, all boarded up, god knows what is living there. We negotiated a price that falls within my formula. House is worth $200K with about $30K repairs and he is giving it to me for $90K. I will try to flip it for $105-110K.

Tonight I talk to the seller and tell him I can fax over the agreement to him. He tells me that he prefers if I speak with a friend of his who happens to be a realtor (not involved in any way in this deal). Actually she is trying to help this guy find housing for his mother. Anyway I told her no problem I would call her and fax the docs over to her in the morning.

I try to feel optimistic but realistically I cannot help but think this realtor is going to screw this up. I have dealt with realtors in the past on these type of houses and they come in with all kinds of demands of high deposits, etc. I will be firm with her when I speak to her and tell her that my policy is little to no deposit on these types of houses. We will close quick, a cash deal. Those are my terms. I don’t budge on my terms in these cases.

Has anyone had to be this way with a realtor. One other thing I hate that they do is tell me what closing company they want to use…that makes me nervous because I have my own title company who I have done double closings with and who has no problem with the process. I don’t need someone else’s title agent telling me it’s illegal to do a double closing.

I guess there is no question in there. Just a random vent and rambling by me.

Your losing control of YOUR deal. YOU dictate everything. Where you close and when? Cash deal or financing commitment letter in 3 days. A sizeable downpayment or deposit? Also…a fire damaged home has 30K in repairs? Is it a smaller home? 1200-1500 sq foot?


Thank you for confirming what I am feeling!

Yes it is a fairly small property …1000 sq ft

Stick to your guns, be fair, but CONTROL your deal. 1000 sq ft makes sense repair wise. Whew! Didn’t want you making a monster mistake. The realtor has no say in this. If the realtor trys to say this or that on behalf of his “friend” then tell him the deal is off and tell him why your deal is the best deal right now right this minute. Creat anxiety and urgency…like…“no one is going to buy a fire hazard like myself” “This can be taken care of in a matter of two weeks” “Let me take this problem off your plate as I know your time and money is important to you” “I have multiple deals in the works and can’t afford to sit here and negotiate on this property so I’m giving you 24 hours to make a decision and I’m moving on”


Thanks Nate for your vote of confidence.

Yeah I was kinda nervous at first with the 30K repairs number but I went through the repair cost sheet I have been using for my area and it adds up about right. Plus I added a little wiggle room in there in case those numbers are on the low end.

Hey Nate…quick update. I spoke to the realtor friend. We were cool up until I told her I would give him $10 deposit to bind the contract. She laughed at me and said no way…$1000 minimum. I told her that I was not going to budge on my terms and that if he didn’t want to accept those terms that is fine. It’s his choice. I did tell her all the catch phrases but it didn’t matter to her. She did tell me that she would take my offer to the seller and see what he says (gee that is nice of her!). I will call the seller to reiterate my terms. When I asked her what will happen to the property if I don’t buy it, she said “she will list it for him”. This should be interesting.

Anyway I stuck to my guns and told her the terms and did everything I felt I could to get the offer accepted so I feel good about that. If the seller is desperate enough he will accept my terms. He has been trying to sell off this property for many, many months with no luck.

excellent. Let them stew over it. Keep in mind as an investor you don’t NEED the deal. There are a lot out there so if this doesn’t go your way don’t worry about it. Go onto the next one. Now instead of giving 10 bucks maybe could you have given a couple hundred or maybe split it and give 500.00? Just a thought. Keep in mind that you can make that deposit up with your assignment fee :wink:


So, is the seller under contract with this Realtor? It sounded like in your first post the seller was just getting some friendly advice, but later you said the Relator would be presenting your offer to the seller. If the Realtor doesn’t have a signed contract with the buyer, I’d deal directly with the seller and tell the Realtor to take a hike.

Yeah it does get a bit confusing but the realtor is not acting as his realtor. She is his friend and is actually trying to find housing for the seller’s mother (nothing to do with this transaction). I didn’t mean that she would be presenting my offer in any legal way to the seller…just that she will talk to him about my terms and give him advice as a friend who is also a realtor. She said that if he doesn’t accept my offer she will then step in as a realtor and list the property herself. I hope that made it clear.

Anyway I told the seller yesterday (he is the one who called me) that I usually don’t like talking with realtors even the friendly ones but if he wanted me to talk with her I would do that.

I have done deals where I would have split a larger deposit but due to the poor condition of this house (this is my first deal on a house with this much fire damage) I just didn’t want to go up past $100.

Sounds like you are starting to get the hang of it.


Okay, that makes a little more sense. Again, though, unless she is legally representing him, I’d deal with him directly. If he refuses, then I’d tell him that by using his “friend” he’ll lose the deal for sure. And if he opts to go with his friend, legally, he’ll be out another 6% on top of the money lost trying to find another buyer.

I know, I will probably be tore up on this but I would have done things differenty, not that your way is wrong but I would have gone down this path.

I completely agree on the closing company thing, I run into this all the time and it irritates the heck out of me. Typically the reason they want to close at one particular company is that there broker has a joint venture with the title company and they will make a small amount of money for closing there, usually they are paid this through a stock ownership in the company which helps them avoid respa problems. I will come right out and ask why they want to close there and if thats the reason, I will just say “if your that desperate to make $40 then ill bring you some McDonald certificates to close”. There pride will usually take over and we end up closing where I want to.

I can tell you from being a realtor and investor myself that I would be nice to all parties involved including the realtor. Many sellers will always go with what their realtors tell them to do, so if you piss her off she could tell the seller not to do business with you, or at least make things more complicated than what they needed to be.

I wouldnt advise any of my clients to do a deal with such a small deposit.

What message are you sending to the seller about your ability to close the deal?

As near as I can tell, your saying that your so confident in your ability to follow through on your contract that your willing to put up $100.

If you were a seller would you be confident in you with the big $100

I can definately see why you would want to do this, but wouldnt it be eisier to just agree to put up $1000 as a deposoit pending inspections. This way sends a strong message that your a serious buyer, and prevents you from losing $1000 because you can always use your inspection clause to back out.
In the case of a fire you know the property is in rough shape so just say in the contract something to the effect of “Earnest money to be deposoited pending the approval of contractor walk thru. Walk thru to take place within 10 business days”

If you use this way you never have to write out a check until 10 days into the deal and by then you will have gotten all of your buyers through and will know whether or not you have it sold. If you do have it sold have your buyers give you a non refundable deposoit equal to the amount you could lose if they back out. If you dont find the buyer then you dont write out a check and you cancel the contract.

This eliminates any realtors argument that you are not a serious buyer, and if they dont like your contractor clause, its alot eiser to argue “that its a big project and you need to check your costs”, than it is to argue the fact that “you have so little confidence in closing the deal that you will give up only $100”

If the deal is as good as you say it is, then I could safely assume that another investor might think it is good as well. Wouldnt it suck to miss a great deal because you wanted to CONTROL the transaction?

I guess if there is so many great deals in your marketplace that you can afford to walk away from something over such small matter, then you are absolutely correct in what your doing.

If you can honestly say that you dont need to worry about someone else moving in well your arguing about the little stuff, then perhaps the deal isnt that good in the first place.

Dont get me wrong, I think what you are trying to do makes sense if there is no possibility of the deal getting taken by someone else, or no possibility that the realtor could find someone else to offer better terms then you. If thats the case then I would play hardball and try to CONTROL the transaction too.

If there is a chance that someone else could come along and buy the house while your arguing your point of $100 vs $1000 earnest money, then I think I would just rearrange things so that everybody thinks their winning and get the deal going.

After all if you lose a deal while arguing about $1000 in earnest money, and your profit would have been $15,000, then essentially you wrote a earnest money check for $15,000 and lost it.

Eric Medemar

p.s. Go ahead fire away, I know I just stepped in front of a cannon of criticism, i’m just prevent you from making the same mistakes that I have seen made.

This seller called me, not the other way around so obviously he must have had some kind of confidence in me from my letters. This is not the first time he has called me about this property. A few months ago he called me and didn’t like my deal . He decided to take his chances with a “friend” who was promising to buy the property the regular way (conventional bank loan). The deal fell through. Here it is 2 months later and he is calling me back to know if I am still interested. I say I am . I offer the same deal as before. Did he think my deal was suddenly going to escalate and get better? I don’t know. It didn’t.

I would have offered him $1000 toward his closing costs in the agreement but we have not gotten that far because his realtor friend was too busy cutting me off challenging me in every way. Keep in mind that she isn’t working for him so my opinion is that if he is as desperate to sell the property as he says he is then I should be talking directly to him and not to her.

As far as the deposit goes, I have done many deals with a low deposit. If he wants a high deposit he can find another investor who will put it up. Right now the only other route they are threatening is to list it and if they do is the realtor really that interested in this guy. He will walk away with at least 6% less than what I was willing to give him.

It sounds like your in the perfect spot then, my bad. Realtors can be a super pain in the butt, especially desperate ones.

Eric Medemar


One thing you said was that “you gave him the same offer as last time you talked” That’s mighty nice of ya :slight_smile: Unless its a really nice deal, if I get a owner who I talked to before and they gave me the runaround on price and blah blah blah, I tell them that offer no longer stands as we have used those funds for another deal. We are now in the position to only give you X amount this time around mr. seller. Just something to think about.


One thing you need to know - Is she a broker or an agent - if she is just an agent working a deal , Im sure her brokerage and state licensing division would like to know shes working deal with out her brokers knowledge. If she doesnt have a signed contract with this guy - she is screwed and could lose her license

If she is a broker - ask her for the Agency Disclosure (if required by law) on this. Not much you can do there.

Hey Nate, Are you my husband because that is exactly what he said…My initial offer was $90K and my husband said he would go no higher than $75K this time around. LOL

God I don’t think I am your husband. Nope. Just asked my wife ;D
I just relay what I have learned in my short 1.5 yrs of investing.