Should You Sell Your House to a Wholesaler?
When deciding if you should sell your house, you must consider whether you can afford to sell your home using a real estate agent. When a real estate agent sells your home, there is a lot more fuss and expense in getting the sale.
Homeowners selling homes listed with real estate agents must get their homes inspected, make disclosures required by law, be prepared to make repairs on the home before the sale, and stage the home. Also, depending on the market, the seller must be willing to wait until a buyer with interest and required funds is found by the agent. Sadly, there is always the chance that the home doesn’t sell, and the property owner is left to carry it until a seller can be found for the home.
If you are extremely motivated to sell your home and don’t want to put any money into it and would like it taken off your hands quickly, call a real estate wholesaler. The real estate wholesaler will not put any money into your home and sell it “as is” to an end buyer. Still, if you decide to do this, you should have your home appraised so that you know its market value and ideally have an inspection done so that you know what is wrong with it, what repairs need to be made, and the potential cost of the repairs. That knowledge may make it easier for you to negotiate a good deal with the real estate wholesaler and prevent you from being ripped off.
In this market, real estate wholesalers are problem solvers. They help move a property quickly and with as little cost as possible to the seller. However, like all middlemen, they want to make money, as much money as possible on each deal. Their profit is the difference between your selling price and the end buyer’s offer. They know they have to work for their money, and you should expect to have to work to get yours from the sale of your home.
What Questions Should You Ask a Wholesaler?
After a wholesaler or wholesalers come knocking at your door, you must decide which one is a worthy business partner. Your goal is to sell your home quickly and get your asking price, a price guaranteed by the purchase and sale agreement you sign with the real estate wholesaler. Thus, you should be asking wholesalers lots of questions!
The questions are designed to help you gauge which wholesaler has the best chance of selling your home quickly. They will also reveal to you, ideally, how well established your wholesaler is in the field and the person’s level of professional expertise. There are no right and wrong answers here, just get the information, review it, and select the wholesaler you want to help you sell your home.
Are You Available to Meet?
It is important to know how responsive the wholesaler will be to your questions, concerns, and requests for meetings. You want a wholesaler who is professional and can give you a phone number, physical address, and email address. If your potential wholesaler scoffs at providing you with this information, walk away, quickly.
Do You Have a Buyer’s List?
Wholesalers with buyers’ lists for properties like yours are better than wholesalers who have to go out and search for a buyer. If the wholesaler already has people with the means and desire to purchase a property like yours, the sale will likely happen much faster, and the closing will be smoother.
Do You Use a Lead-Generation Program?
Although wholesalers should have extensive relationships with property buyers and sellers, they will still need ways to bring more people into their network. So, your question to the wholesaler is, how are leads generated? Does the wholesaler use social media, a website, print ads, and/or word of mouth? Once you have this information from the wholesaler, check out the wholesaler’s lead generating methods and decide if the lead generation strategies are effective. After all, the wholesaler may need to generate leads to sell your property.
How Experienced Are You at Wholesaling Houses?
Whether you select to work with an experienced or inexperienced wholesaler, it is important that the wholesaler understands the wholesaling process and stay on the right side of the law. Experienced wholesalers may make you more comfortable but may not always be the best choice for your sale. You want a wholesaler who is hungry for a sale, understands the wholesaling process, and will do what it takes to find a buyer for your property.
Are You Prepared for All Outcomes?
It is great to think that all wholesalers find end buyers or get the deal they want with them. The truth is sometimes they are not successful in finding an end buyer or getting a ‘good’ offer from a potential end buyer. In either case, what will the wholesaler do? You want to know that the wholesaler has considered all possibilities and is prepared to deal with them.
How Much Earnest Money Are You Offering?
In a perfect world, the wholesaler will put up earnest money equal to or greater than the property’s closing costs. Well, it’s not a perfect world. Some great wholesalers put down a pittance in earnest money, while others put down more substantial sums.
The earnest money is a down payment on the closing of the real estate transaction. Property sellers tend to lose money during the real estate closing. The more money you get upfront, the better your chances are of doing well at the real estate closing. It’s your decision because the risk and potential money lost are yours.
What is Your Assessment of the House?
Ask the wholesaler to tell you the estimated value of the property. You, the property seller, should already know how much your property is worth. If the wholesaler lowballs you, find someone else. You shouldn’t enter into a deal with someone trying to cheat you or a wholesaler who can’t competently assess your property’s value.
How Long Will You Take to Close the Deal?
You, the property seller, want the deal closed as soon as possible. The wholesaler wants the same thing but may not be able to deliver within the property seller’s desired time frame. So, it is up to you, the property seller, to ask the wholesaler how much time is needed to sell the home to an end buyer. Purchase and sale agreements can bind the property seller to the wholesaler for any period of time. The time period given should not exceed six months. If you want the period shorter than that, like three months or 10 days, stipulate that in the contract. Just remember that how quickly your property sells is not entirely dependent upon the wholesaler; there may be market conditions that complicate and delay the sale of your home.
Will You Meet My Asking Price?
As the property owner, you should have decided what you would like for the property and the lowest amount of money you are willing to take for it. Discuss the asking price with the wholesaler and find out if it will be met. If not, you should move on to the next wholesaler. Note, before dismissing a wholesaler, make sure that your expectations are realistic given the market conditions and that you can afford to wait for a better offer.