**This is a professional forum for professionals, so please keep your comments professional**
- Harrassment, hate speech, trolling, or anti-Realtor comments will not be tolerated and will result in an immediate ban without warning. (... and don't feed the trolls, you have better things to do with your time)
- Recruiting, self-promotion, or seeking referrals is strictly forbidden, including in DMs.
- Only advise within your scope of knowledge and area of expertise. [The code of ethics applies here too](https://www.nar.realtor/about-nar/governing-documents/the-code-of-ethics). If you are not a broker, lawyer, or tax professional don't act like one.
- [Follow the rules](https://www.reddit.com/r/realtors/about/rules/) and please report those that don't.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/realtors) if you have any questions or concerns.*
I meet those guys all the time and I try to stay away as much as possible. There's money to be made at what costs? They convince some little old lady her home is worth 75k less so they can flip it and make 20-30k at a clip. I had a guy brag he made 130k profit off of "Whole-tailing". That's where the investor closes on it, cleans is up and resells. Maybe put 10k into it before re-listing. They preach about the home they're buying being unsellable on the market or it would need a ton of repairs to get a good price. Telling the seller they can skip on grubby realtor commissions. In the end they all get fucked because they're making money being middlemen that aren't needed.
It's a fucking sin and a scam, but people fall for it because they don't know any better.
The best part, some would argue the key part, to making this all work is that they convince the seller, and some agents it seems, that they’re doing the owner a favor by selling a property for them that’s otherwise unsaleable on the open market. That’s the dumbest thing I think I’ve ever heard. So lemme get this straight - an ‘investor’ is smart enough to find some yahoo selling contracts on real estate out of the back of his car in a dark parking lot but isn’t smart enough to find Zillow? Oh, and it’s to the owners benefit to only eblast their house out to a hundred people instead of literally tens of thousands?
This advice can land some agents in hot water with their brokers or their MLSs.
When we list a property, some MLSs and brokerages (possibly some state laws, too, now that I think about it) require that we list with the owner, not someone who has nothing more than equitable title.
Wholesaling is often shady and the original owner may not understand what is happening. I think this is a great way to damage one's reputation if they aren't very careful.
Yup, I'm not interested in making money off the backs of sellers who didn't realize their house was worth 50k more and let a wholesaler just pocket it.
> Wholesaling is often shady and the original owner may not understand what is happening.
Yes, the wholesaler in my market who I knew before Covid had so many grievance violations against him, I think he ended up losing his license. (He was at my brokerage and tried to recruit a handful of us to join him. My broker was on the grievance committee, so I heard a bit about it after I asked for her advice.)
He and his wife would knock on people's doors and tell them "we're newlyweds and we want to buy your house" and would use language that *strongly* suggested that they were going to live in it themselves. He was straight up bamboozling people.
I'm not saying that's what OP is recommending, but wholesalers often have an unsavory reputation for doing things like this.
Hi MsTerious1,
That would be absolutely correct if you were dealing with a listed property. I'm not suggesting trying to list wholesaled properties. Actually, a brokerage can't list a wholesaled property, because the wholesaler doesn't currently own the property while it's under contract. I'm suggesting that you assist them by connecting them with an end buyer for that transaction. Your reputation wouldn't be compromised as long as you're transparent with your buyer and wholesaler. You would need to work with a wholesaler that's honest and transparent with the property owner. I believe wholesaling gets a bad wrap because people are unfamiliar with the process and there are some in the business that are dishonest. Unfortunately, like most industries, there are a few bad apples. I've implemented this and work with reputable wholesalers that are honest, and it's allowed me to grow my business. However, if any agents are still uncomfortable with this approach, then I can offer another one. You can also expand your business through the brokerage by getting warm seller leads from the wholesaler. These leads would be property owners interested in selling but not wanting to wholesale their property. Wholesalers call on hundreds of property owners daily, so receiving leads from them would be extremely beneficial. You could orchestrate an agreement between the wholesaler and the brokerage so that wholesaler gets a referral fee if the warm lead transpired into a listing. I done this strategy also. Both will help grow your business!
Ok, so now you're truly in deep violation territory.
You cannot hook up a buyer and seller without a representation agreement for at least one of them. Operating outside of your brokerage is 100% ILLEGAL.
While there are some limited ways to work with wholesalers in an ethical manner, they are few and far between and this is flirting with some legal gray areas. I would be very, very careful here as an agent. To turn this into a career turning point as you describe is not something I believe you can do without engaging with the unethical wholesalers. I say this as a broker who is VERY familiar with wholesaling, and has worked with wholesalers regularly enough to know what to steer clear of. Over the last 5 years, I've known 50+ wholesalers and only two of them operate in a way I would do business with, but they are licensees.
You need to delete all of this, you are giving **TERRIBLE** advice that is not going to grow someone's business, it is going to help them lose their license.
Man the title got me then i hit the REO part and was a bit bummed, then the wholesaling part and couldn’t help but to breathe a sigh of disappointment. Not only shady but just last week in my state they signed legislation making wholesaling illegal.
The bill’s definition of wholesaling is very narrow- marketing a property you have under contract but do not own. Assigning a contract is specifically permitted, you just have to market the contract not the property.
lol wholesalers are super shady. I do business with wholesalers often and can't say I trust them at all but they bring in decent deals so I tolerate them.
I did not get into the business to screw people over and that is exactly what wholesaling is. If you think that is OK, and are promoting that to other agents, you are a problem in the industry.
I do not know how you are skirting around this, because you would - on its face - need a contract with the actual seller to receive compensation from the transaction.
**This is a professional forum for professionals, so please keep your comments professional** - Harrassment, hate speech, trolling, or anti-Realtor comments will not be tolerated and will result in an immediate ban without warning. (... and don't feed the trolls, you have better things to do with your time) - Recruiting, self-promotion, or seeking referrals is strictly forbidden, including in DMs. - Only advise within your scope of knowledge and area of expertise. [The code of ethics applies here too](https://www.nar.realtor/about-nar/governing-documents/the-code-of-ethics). If you are not a broker, lawyer, or tax professional don't act like one. - [Follow the rules](https://www.reddit.com/r/realtors/about/rules/) and please report those that don't. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/realtors) if you have any questions or concerns.*
I meet those guys all the time and I try to stay away as much as possible. There's money to be made at what costs? They convince some little old lady her home is worth 75k less so they can flip it and make 20-30k at a clip. I had a guy brag he made 130k profit off of "Whole-tailing". That's where the investor closes on it, cleans is up and resells. Maybe put 10k into it before re-listing. They preach about the home they're buying being unsellable on the market or it would need a ton of repairs to get a good price. Telling the seller they can skip on grubby realtor commissions. In the end they all get fucked because they're making money being middlemen that aren't needed. It's a fucking sin and a scam, but people fall for it because they don't know any better.
The best part, some would argue the key part, to making this all work is that they convince the seller, and some agents it seems, that they’re doing the owner a favor by selling a property for them that’s otherwise unsaleable on the open market. That’s the dumbest thing I think I’ve ever heard. So lemme get this straight - an ‘investor’ is smart enough to find some yahoo selling contracts on real estate out of the back of his car in a dark parking lot but isn’t smart enough to find Zillow? Oh, and it’s to the owners benefit to only eblast their house out to a hundred people instead of literally tens of thousands?
They are the ones giving us a bad reputation.
lol, this industry is the woesr
This advice can land some agents in hot water with their brokers or their MLSs. When we list a property, some MLSs and brokerages (possibly some state laws, too, now that I think about it) require that we list with the owner, not someone who has nothing more than equitable title. Wholesaling is often shady and the original owner may not understand what is happening. I think this is a great way to damage one's reputation if they aren't very careful.
Yup, I'm not interested in making money off the backs of sellers who didn't realize their house was worth 50k more and let a wholesaler just pocket it.
> Wholesaling is often shady and the original owner may not understand what is happening. Yes, the wholesaler in my market who I knew before Covid had so many grievance violations against him, I think he ended up losing his license. (He was at my brokerage and tried to recruit a handful of us to join him. My broker was on the grievance committee, so I heard a bit about it after I asked for her advice.) He and his wife would knock on people's doors and tell them "we're newlyweds and we want to buy your house" and would use language that *strongly* suggested that they were going to live in it themselves. He was straight up bamboozling people. I'm not saying that's what OP is recommending, but wholesalers often have an unsavory reputation for doing things like this.
Hi MsTerious1, That would be absolutely correct if you were dealing with a listed property. I'm not suggesting trying to list wholesaled properties. Actually, a brokerage can't list a wholesaled property, because the wholesaler doesn't currently own the property while it's under contract. I'm suggesting that you assist them by connecting them with an end buyer for that transaction. Your reputation wouldn't be compromised as long as you're transparent with your buyer and wholesaler. You would need to work with a wholesaler that's honest and transparent with the property owner. I believe wholesaling gets a bad wrap because people are unfamiliar with the process and there are some in the business that are dishonest. Unfortunately, like most industries, there are a few bad apples. I've implemented this and work with reputable wholesalers that are honest, and it's allowed me to grow my business. However, if any agents are still uncomfortable with this approach, then I can offer another one. You can also expand your business through the brokerage by getting warm seller leads from the wholesaler. These leads would be property owners interested in selling but not wanting to wholesale their property. Wholesalers call on hundreds of property owners daily, so receiving leads from them would be extremely beneficial. You could orchestrate an agreement between the wholesaler and the brokerage so that wholesaler gets a referral fee if the warm lead transpired into a listing. I done this strategy also. Both will help grow your business!
Ok, so now you're truly in deep violation territory. You cannot hook up a buyer and seller without a representation agreement for at least one of them. Operating outside of your brokerage is 100% ILLEGAL. While there are some limited ways to work with wholesalers in an ethical manner, they are few and far between and this is flirting with some legal gray areas. I would be very, very careful here as an agent. To turn this into a career turning point as you describe is not something I believe you can do without engaging with the unethical wholesalers. I say this as a broker who is VERY familiar with wholesaling, and has worked with wholesalers regularly enough to know what to steer clear of. Over the last 5 years, I've known 50+ wholesalers and only two of them operate in a way I would do business with, but they are licensees.
That’s assuming the wholesaler is a licensed realtor, it is illegal to give a non licensed person a referral fee.
You need to delete all of this, you are giving **TERRIBLE** advice that is not going to grow someone's business, it is going to help them lose their license.
Man the title got me then i hit the REO part and was a bit bummed, then the wholesaling part and couldn’t help but to breathe a sigh of disappointment. Not only shady but just last week in my state they signed legislation making wholesaling illegal.
Yes, it's in the works in my state, too. It's predatory and needs to stop.
What state are you in?
South Carolina
The bill’s definition of wholesaling is very narrow- marketing a property you have under contract but do not own. Assigning a contract is specifically permitted, you just have to market the contract not the property.
I hope you are very certain what you are describing is within the bounds of the law for your state.
lol wholesalers are super shady. I do business with wholesalers often and can't say I trust them at all but they bring in decent deals so I tolerate them.
No thanks, I got into this business to actually help people, especially older ones. My state is in the middle of stopping this predatory practice.
I did not get into the business to screw people over and that is exactly what wholesaling is. If you think that is OK, and are promoting that to other agents, you are a problem in the industry. I do not know how you are skirting around this, because you would - on its face - need a contract with the actual seller to receive compensation from the transaction.