On this episode of the Real Estate Fight Club Podcast, Jenn and Monica are going to duke it out over, Is wholesaling illegal? What do you need to know about wholesaling? Jenn and Monica also talk about how real-estate agents get access to things that are good wholesaling products. Wholesaling can work on any house. It just depends on what the seller wants, says Jenn. Tune in.
Episode Highlights:
- As per Jenn wholesaling is not illegal and it shouldn't be illegal. Wholesaling is when you get a property under contract and then you sell that contract, and your commission is the spread. For example, you buy a property for $200,000. You sell the contract for more and then the difference is what you would make.
- In wholesaling you charge an assignment fee, and you assign the contract to them. Then you change the buyer.
- Jenn shares how lack of access to the source prompts wholesaling.
- Not every seller wants their house to go on the market. Not every seller wants the highest amount. Sometimes they want terms, says Jenn.
- When Jenn was wholesaling, they were wholesaling short sales. Jenn explains what short sales are and how they negotiated with the bank and the seller.
- A lot of people say you cannot be a real estate agent and be a wholesaler because if you are, then you give up some fiduciary responsibility as an agent that you have. But Jenn disagrees with this. She says that as a fiduciary, she needs to do what's best for the client.
- As per Jenn, wholesaling can be less dramatic. You can have less people in your house. Some people care about that, especially since COVID.
- There are a lot of ways to sell a house. One is we go on the market and based on the data; the client can look at it too. And sometimes Jenn does the CMA with the client. So, they can literally see her thought process of how we do this, says Jenn.
- Jenn says that wholesaling is usually people that have equity in their property, like a substantial amount of equity. So maybe it's like a probate thing or they inherited the house, or the house had a lot of repairs; They have equity, but they don't have cash.
- If you are an agent that sells a lot of houses and you have all of these tool belt tools in your tool belt available, you are naturally going to be more consultative.
- As a real estate agent, you truly have to authentically care about your client and give them proper advice.
- When it comes to wholesaling you can really negotiate anything that you want. There is nothing that dictates that we have to do it in a specific way, says Jenn.
- As per Monica the current market is so good, the seller should put the house on the market because they can get more money.
- As a real estate agent and in this shift that we are experiencing and will continue to experience, Jenn thinks that we have got to continue to learn and part of learning is different strategies on how to sell a house, familiarize yourself with wholesaling, familiarize yourself with how investors decide what to buy, return on investment 1031 exchanges.
- Jenn suggests when you generate leads, have a conversation with the seller, figure out what it is that they really want and then take all the ways to sell a house and match it with that and then you then you control your income. It's the easiest way to control your income.
- As per Tiebreaker Curtis Cunningham, wholesaling is not illegal. He explains what wholesaling is and why it is not illegal.
- There are a lot of agents out there that do not wholesale and do not know what it is and what they do know about it is wrong, says Jenn.
- Curtis shares insights on the reason that a seller would prefer to wholesale it rather than put it on the open market.
- There are a lot of ways to sell a house and as real estate agents, we should understand them all and not judge because every seller's situation is different, and so to be able to present the options in a in a non-judgmental way really fulfills our fiduciary of doing what's right by the client says Jenn.
3 Key Points:
- If you know how to generate leads and you understand that there are many ways to sell a house and you take a consultative approach with the seller to find out what their needs are, what is best for them, and you have access to all the ways to sell a house you can truly do what is best for the seller.
- Jenn says that agents are having problems with disclosing. This is why the Department of Justice is coming after real estate agents because they are not disclosing how the commission works.
- As per Monica wholesaling is dangerous. She says when you are licensed, you know so much and there is room for leaving things out, either conveniently or accidentally.
Resources Mentioned:
Curtis Cunningham:
- 765-717-2407
- curtis@yourhoosierhome.com
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