Wholesale with sellers who have a realtor?

Bird Dogs, Wholesaling
1

Do any of you ever wholesale properties when the seller has it listed with a realtor?

I’ve always heard that it’s a waste of time working with a seller’s realtor…i’ve heard “just mail them again in 3 months after the listing expires”…but a number of leads coming in have the properties listed.

Should I pursue wholesaling these now? If so, any tips on how to do it?

Thanks!

2

I’m a wholesaler in Northern Virginia. I can’t find good deals from private sellers. I’m finding cheap deals with lots of equity on the MLS. I have an investor friendly buyer agent.

Since the earnest money deposits (EMDs) are generally much higher than with private seller deals, I’m only putting an offer on one house at a time. I wording my contingencies so my EMD will be the most money I can lose on a deal. I’m also using a 15-day inspection contingency. This gives me 15 days to either get an end buyer involved or for me to actually get a home inspection done. The fee would only be about $150 vs. $500 or $1,000 for the EMD.

3

Good idea!

Have you or anyone you know gotten a lead from a motivated seller that currently has their house listed with an agent?

Do you work with the agent and pay an extra 3% commission or does the seller just pay the realtor out of their profit?

4

The listing agent will get paid at the closing by the seller. I am assuming that you are not licensed which means that you are also not entitled to the 50% split on commission that the listing agent usually shares with the agent who brings the seller. But that also means that you won’t have to pay them commission either.

5

Oh I see.

So the seller would just pay the listing agent 6% out of their profits?

If the seller is wanting you to just talk with the agent, do you try to just talk with the seller? I would imagine it would be pretty difficult to negotiate a good price with an agent…

6

Here in nj, the realtor contracts say contract is nonassignable. And i have had trouble crossing it out, i will consider a double close if its enough profit to make in the deal. other than that i prefer to not deal with realtors.

7

Trying to wholesale with a realtor caught in the middle is not impossible, but highly improbable. For one reason, the realtor wants as much commission as possible; so they are going to price the property at the market value. This leaves a very small profit margin for a wholesaler.

Secondly, realtors get very possessive of their clients and their market. They do not like “sharing” a deal, even if it means closing a sale. They tend to guard their real estate market and push out all non-licensed wholesalers, bird-doggers and other individuals who are trying to make a living from real estate.

I am not saying it is not done, but you will have much better success wholesaling unlisted properties.

8

Ya, that was the conclusion that I came to as well.

Thanks for the advice!