Hey everyone! I thought for my first on ActiveRain I would speak from the perspective of most agents' pesky lil friend - the real estate wholesaler.
If and aren't familiar with real estate wholesaling, it's when a seller and a "buyer" agree on a price, sign a contract (below market value), and then the "buyer" assigns his rights and obligations of that contract to another buyer for a hefty fee (often times 10% or more of the sales price).
What?! Why would a seller actually do that? An agent could list on the MLS and the seller's proceeds would be way more! I'm sure that's what most agents reading this are thinking. The bottom line is, the traditional route of listing a home doesn't meet every seller's needs. If it did, real estate wholesalers wouldn't exist. These sellers typically need to sell a house fast for cash. But, that's a discussion for a different post.
I want to talk about the opportunity agents have to work with and co-exist with wholesalers (the ethical ones anyway.)
For a wholesaler to get a deal from a seller so good that they can lock up a contract and then assign the contract for a fee, how many sellers do you think a wholesaler needs to talk to?
Well, it depends on the market and the marketing channel but the answer is, A LOT! They typically have to talk to around 20 people who WANT TO SELL THEIR HOME before they get that one seller who is in the position to accept a cash offer at a discount.
What do you think most wholesalers do with those 19 other sellers who want to sell, but for fair market value? Most of them do nothing! I mean it. They just throw those leads away. Sad right?
You may not agree with the concept of wholesaling. But, as an agent, can you agree that there is a lot of incentive to befriend and network with wholesalers and other cash home buyers? They could be passing you those leads daily! And for all the properties they do buy to flip, someone is going to list the house. Why not you?
If anyone wants to learn how to build relationships with wholesalers and investors let me know. I'd be happy to answer any questions and it might just be the topic of my next post.