Wholesalers & Assignment of Contract

When people contact you and want to purchase your home "off market", chances are that they are what is called a "wholesaler".  They typically want to find homes for sale at very discounted prices because the believe that they can find a buyer that will pay a higher price for it.  There are so many out there these days and they all have different tactics but the main issue is that they typically have no intention of actually purchasing your property and they don't have a real estate license or insurance.  Realtors were created to help protect consumers from this sort of activity where home owners are being taken advantage of and being convinced to sell their property for less than market value. 

 

Entering into a contract without the intention of fulfilling it is fraud.  How they skirt the law here is that they intend to fulfil an "assignable contract" by assigning it to another buyer.  They typically will have extended contingency periods to give them plenty of time to try to find a buyer.  Some of they may just call every Realtor on Realtor.com to see if they have a buyer to purchase it.  I have received those calls before.  And I have received calls from Realtors who have asked me why someone is calling them to buy my listing at a lower price than what I have it listed for.  (His contract price was lower than the list price and he had room to make a small profit).  Their method of selling is typically to suggest that the property is extremely under valued from the price they are trying to sell for based on using comparable sales in the area that are many times nothing like the actual property that they are trying to sell.  They use many unethical practices like this in order to make a quick buck on your property.

 

How they get away with being unlicensed is that they are working for a company who can provide proof of funds, so they are an "employee" of that company who has a right to sell their interest in the purchase contract.  The reason that they want to keep the property "off market" is so that the sales information isn't as accessible to future buyers to show that the property was just marked up from the last sale.  My point is if you want to make a living in this business, why don't you just do the right thing and go out and get your real estate license?  Sellers, make sure you are working with a qualified, experienced, licensed & insured Realtor to get the most value for your property.  If a wholesaler knows he can get more for your property than he is offering, you should know that too.