As a real estate wholesaler, you perform a very valuable service. You help motivated buyers and sellers find each other in a very noisy market. The real estate wholesaler is not always looked at as a benevolent soul trying to make everyone’s life better. It may be that people consider you as a pest, someone making money off of the misery and desperation of property sellers. Buyers, well, their perspective depends on their relationship with you and other buyers.
So, how do you decide who to help? Ask lots of questions and make sure that you are not putting effort into properties that you can’t sell because the property owners are too difficult to work with or refuse to work with you. Also, it is important to get critical information at the outset and determine the integrity and frankness of the property seller.
Wholesaling Questions: Seller’s Information
Whom Am I Speaking With?
When looking for distressed properties and investigating them, make sure that you identify the property owner(s) and decision-makers. It is a complete waste of time to talk to someone, work out a deal, and then have to start all over because the final decision maker and/or property owner wants to renegotiate terms. You want to know that you are working out a deal that will stick and can be spelled out in a purchase and sale agreement.
Why are you looking to sell the house?
This is one of the most important questions you can ask the seller. Make sure you get an honest bare-bones answer to it. If the seller starts to renege, waffle, or play games, remind the seller why you’re there and what they need you to do for them. After all, those bills they can’t pay aren’t going to magically pay themselves or disappear. Impress upon the sellers the importance of addressing the concern(s) that motivated them to talk to you.
What asking price did you have in mind?
Ask the property seller about the asking price and decide if you can meet it. After all, you have the property’s address, research on the property, and had an inspection done on it. You may have even had an appraiser look at it. With the asking price in mind, make sure you have a seller who will work with you to sell that property. If the property owner has unrealistic expectations, walk away unless you strongly feel that you can convince the seller to accept a lower asking price.
What did you base your asking price on?
One way to gauge the seller’s knowledge of the property and market is to ask the seller to explain the basis of the asking price. The seller may enlighten you on some aspects of the real property that are not known to you and ones that can significantly affect the property’s value. On the other hand, this is also a chance for you to understand the assumptions about and misunderstandings the property seller has about the real estate market. This can be your opportunity to educate the seller about the market, influence the seller’s asking price, and get more detailed information about the property before you find an end buyer for it.
How soon did you want to have it sold and closed?
Ideally, your motivated seller wants that property sold as soon as possible. If your seller is comfortable holding on to the property for an extended period of time, they may not be motivated enough to close the deal. In the alternative, if your seller wants the property sold in 3 days, you may want to walk away too. If the seller’s expectations of you are unrealistic or likely to cause you distress, walk away. You, the wholesaler, are a professional doing a job that requires relationship building, persuasion, and negotiations. These things cannot be rushed because a seller wants the deal done yesterday.
What would be the least you would be willing to take on a cash offer to buy it ‘As-Is’?
This is the seller’s squeal point. Once you have this information, you know how low you can go on an end buyer’s offer and still make some money on the deal. This may also indicate to you the seller’s degree of motivation/desperation to unload the property. Try to understand the seller’s rationale for the lowest acceptable buyer offer. If possible, secure the price point that’s ideal for you to give yourself more wiggle room when negotiating with the end buyer.
Wholesaling Questions: Property Assessment and Contact Information
When can I come by to see the house?
Never accept the sellers’ word for anything! Ask to see the property, the title, and anything else that affects the sale. Some sellers will outright lie to your face. Others may forget things or just not think that they are important enough to discuss with you. Visit the property ASAP and assess it. Word to the wise, if the property owner is not making an effort to get you out to the property so that you can assess it and find an end buyer, the seller may be misleading you about some aspects of the property or the desire to sell it.
What is the best way to contact you?
This should not be the first question you ask the seller. You must establish a repertoire with the seller. And then, when you have had a meeting of the minds, or at least decided to move forward to some extent, ask for the seller’s contact information. Plus, some sellers may decide not to work with you several times before they say, “Yes, let’s do a deal.” If you follow up on leads and stay in contact with potential sellers, you may find that they will decide that they want to do business with you after the fifth or even the twelfth interaction with them.
How did you hear about me?
This question is used to discern what the seller thought was special or noteworthy about you, how the decision was made to contact you, and where you should be focusing your marketing efforts. Focus your marketing efforts on the areas that generate leads.
Wholesaling Questions: General Property Information
What is the Address of the House You Want to Sell?
Don’t assume that you know the location of the property to be sold. Ask the property owner for the exact address of the property, and then go visit it. Any time or money spent researching a property that does not belong to the seller gets you nowhere and nothing.
How many bedrooms does it have?
A basic, direct question that should be easy to answer. Does the home have two bedrooms? Three bedrooms? Etc. Your job is to make sure that the bedrooms are not converted attics, basements, or garages.
Does it have a garage, basement, or pool?
These things may increase or decrease the value of a property. You need to know if the attic and basement are finished. If there is a pool, is it in good condition? Are there any other aspects of the property that people might be interested in?
Wholesaling Questions: Property Condition
What repairs and/or updates would it need if you were to list it with a Realtor?
By law, when a property is sold, it must meet a minimal standard of habitability that is determined by each state. You are selling the property “as is,” but you still need to know what kinds of repairs must be done by the end buyer to bring the property up to code. This is important because those repair costs will affect the end buyer’s offer and what is considered to be an acceptable asking price.
Wholesaling Questions: Debt Against the Property
How much is owed on the house?
You want to know if the property has a free, clear, and transferable title. If not, you must know of any liens, mortgages, or other financial obligations that must be satisfied before the property is sold. These need to be understood and addressed before the asking price is stipulated in the purchase and sale agreement.
Is the house behind on payments?
Never ask if the buyer is behind on payments. This may create tension and hostility. Ask if the house is behind on payments. If it is, ask how many payments have been missed and if the property is going into foreclosure. In short, you need to know if the seller has any equity in the house. If so, you then decide if there is enough for you to sell it and make a profit.