Wholesaling Some Real Estate? Careful With Decisions About Buyers
Just recently we had a situation that happens from time to time where people put themselves in a position that doesn’t make sense. We had a wholesaler or at least we thought it was a wholesaler send us a deal that we made an offer on. The price was rather high for what was being offered but the area is starting to improve so we made an offer. And for that matter, always make the offer as you never know what will happen! This is how great deals oftentimes begin.
Sadly, that wasn’t the case with this one as we got a reply back from the wholesaler that they were dropping us from their Buyers list because we always make ‘low ball’ offers. Keep in mind they are sharing this with an active and real Buyer. This is not the best business decision to make. Nevertheless, we felt our offer was approrpiate for the area and certainly have the data straight from the MLS to support it.
In any case, we responded letting them know that that was fine and wished them the best. I have not met a single Buyer in my life that is begging to be on any wholesalers Buyers list and we certainly are no exception. What came next though was the interesting part which sadly happens too often.
Real Estate is a small world. A great deal of the very active investors do know each other and walk in small circles. Experienced investors see a lot of people come in and out of the business. That being said, we ended up getting this same deal from two more additional wholesalers, both at a lower price. In fact, the one that sent it to us at the lowest price which was $15,000 cheaper was a wholesaler we have done business with. Oops for the first wholesaler who sent it to us.
Whenever we wholesale something, we definitely don’t recommend large markups because of this small world. Everyone it seems is on the same lists which is fine. Buyers will naturally go to the lowest price if they get something from multiple people Perhaps they may pay more if it comes from someone they have a relationship with they feel better about. Anything can happen.
However, to remove a Buyer from your list because they were ‘low ballers’ when one has the deal marked up $15,000 over another wholesaler? This is not a wise decision. Unfortunately this is the sort of decisions that give wholesalers a bad name far too often. As an avid believer in wholesaling, I strive to educate others to make better choices in their business. Sometimes Buyers on your lists may not buy for you from years but the real ones are looking as they do want to buy!
In the end, we may not buy this deal but unfortunately for this wholesaler, he had a Buyer who loves wholesalers that he is removing from his list. Poor decision in our opinion but we wish him the best.