Okay, gang, we have a really great wholesaling question sent in by one of our fellow readers:
“When you find buyers who want to see your wholesale property, what do you tell the seller to get them to allow your buyers to come view the property? Since this is not really your property, isn’t it hard to get them to let you show it all the time? Do you just tell them you are bringing on a partner? Could really use some insight on this one, feeling stuck. Thanks.”
Well, Deborah, I’m here to help you get unstuck…
Upfront Honesty: An Investor’s Best Policy
It’s a great question and one that every real estate investor inevitably runs into.
My philosophy is:
If you are upfront and honest and use great communication with the seller, you are more likely to have a smooth deal with no complications.
I let them know right off the bat that my business model as an investor is to buy, fix-up and sell houses. I go on to tell them that part of my business also involves working with sellers that want to sell… and the other part is working with customers that want to buy. Sometimes I just have to marry the two.
I explain that sometimes my job is to simply play matchmaker, and for this service I make a small fee. I pretty much give them a full disclosure…
This way, to answer your question, I don’t have to create an excuse to show the house. They are expecting me to show the house. They know exactly what’s going on and what to expect.
I give them a heads-up when I’m bringing by some buyers and they’re expecting that to occur because – say it with me – I was upfront and honest from the beginning.
Also, you could just tell the seller you have a handful of “funding partners” that will need to review the property. This generally works well.
In my experience, I’ve found that as long as I am not charging some ridiculous wholesaling fee the seller doesn’t really care. The seller will be okay with knowing you are making $3,000, $4,000 or even $6,000.
Why? Because they have been treated fairly, and you’re not taking advantage of them.
Build good rapport and use excellent communication skills you’re usually good to go.
The Caveat to Remember
If I find myself in a situation where I haven’t been as upfront with the seller as I should have been, it’s usually because my original intention was to buy, fix-up and sell the property and not wholesale it – for some reason, I switched gears.
What I do then is call them and let them know I am bringing a contractor (or someone on my team that’s a rehab expert) by so we can understand the deal better.
Sometimes explaining it over and over again can be challenging. At that point, I just tell them exactly what I am going to do.
Be Confident When you Explain Wholesaling
If you aren’t disclosing the information and they find out, you may run into trouble… especially if they find out right before closing and you have a nice-sized spread.
So my advice would be to tell them from the beginning exactly what your options are and what you plan on doing.
The fact that you’re asking this question, Deborah, may be because you’re uncomfortable with the idea of disclosing to the seller what you’re really doing. You need to make sure when you explain your business model you have confidence. If you come-off as sheepish, apologetic or shady, they’re not going to trust you.
If you still feel like showing the house is going to be problematic, make a property-showing video and take some pictures while you’re there.
If the seller lives in the property and getting access to show the property is a problem, then have your cash buyers drive by and make their offer based on your videos/pictures. Have them sign a contract contingent upon a walk-through of the property. Also, requesting that they put down earnest money lets you know they are serious.
I hope these suggestions help. Best of luck, Deborah!
Give us a Shout
Do you have any other tips for working around this potentially uncomfortable situation? I’d love to hear thoughts in the comments section below.
Until next time…
Keep it real,
- Communicate well with the sellers and be honest about your business model and options.
- Exude confidence when explaining the process of wholesaling to the sellers.
- Take excellent pictures and make a property walk-through video in case there is ever a problem with showing the house. Consider having potential buyers put down earnest money and sign a contract, with a property showing as a contingency.
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