We got a call yesterday from Kevin Hardy with the Kansas City Star. It seems the reporter was digging into the rift that has been brewing across the country between wholesalers and real estate agents. Because we are both and because we are leaders in the local real estate investor community, owning and managing a major trade association, he wanted to get our input. Let’s see if I can shed some light on the differences.
A wholesaler offers homeowners an option when they are trying to sell a property; typically, the house is in a state of severe disrepair and often sellers don’t want to or can’t make the repairs that the average real estate agent would suggest. And while a seller can list a fixer-upper with a real estate agent to sell, many don’t like to take on less-than-perfect houses. Wholesalers on the other hand love these less-than-perfect homes because they have buyers looking for fixer-uppers.
Just What is a Wholesaler?
While most people know that a Realtor is a person who will list a home for sale in the super exclusive multiple listing service to help you find a buyer. They do all the paperwork and supervise all the tasks and people involved. And once the home is sold, they get paid a commission.
A Wholesaler on the other hand is a person who is buying your house with the sole purpose of selling it for a profit. Some wholesale transactions will see a wholesaler who actually does buy your house and then market it and sell it for a profit. Others will get your home under contract and then market that contract to their list of buyers looking for a fixer-upper. One of those buyers will pay the wholesaler an “assignment fee” to buy that contract – the wholesaler’s profit – and then that end buyer will buy your house.
Realtors contend that this wholesaler is acting as an agent without a real estate license and without all the training and oversight that the Realtor has. If the wholesaler is doing things correctly, this is not really the case. If they are not doing things correctly, and when they don’t do what they promised, that’s when everyone gets upset.
So, to help educate our sellers, we wanted to share the three fundamental differences between property wholesalers and Kansas City real estate agents.
An agent has no guarantees to offer, not even about when or even if your property will sell. While they can and do make an educated guess, they have no way of saying that on such and such a date your house will be sold and you will get your money. What an agent can do is market the home and get it under contract, and then you are subject to inspections, repair requests, appraisals, and loan approvals on the part of the buyer. In fact, they can’t even guarantee once you have a contract that the buyer will not back out and leave you high and dry.
Of course, if your Wholesale buyer is not experienced and does not know what they are doing, they probably can’t give you any guarantees either. If they are new to the business, don’t know what they are doing, and offer too much for your property, you may find that they can’t find that end buyer we told you about and they too might back out at the last minute.
So, what can you do if you need your house sold on a particular date so you can get your money and move on? We suggest a professional cash home buyer. This type of buyer may be buying your house to wholesale, they might be buying to fix it up and sell it or rent it out. What makes them different is that they will actually come to walk through your house, assess the needed repairs, and calculate a fair cash offer based on area comparable sales. This will be an offer that they know they can stand behind.
Here at kcmoHomeBuyer, the Tuckers are primarily buying your house to fix it up. We’ve been doing this for a few years and we know houses, repairs, the market, and buyers. We can make you a guaranteed offer and if we can’t, because some houses just don’t fit our buy box, we can offer you alternatives
Wholesalers not only save you time with their fast closings, but they can also save you a significant amount of money because they don’t work on commission; one of the main differences between property wholesalers and Kansas City real estate agents.
When we buy your house for cash here at kcmoHomeBuyer, we don’t charge you any commission. We can however put on our Real Estate Agent hats and tell you what we think we could sell it for should we list it and what your commission and fees would be. Then you can compare the two and see if you want the guaranteed price on a specific date or an estimated price on an estimated date.
We highly recommend getting both the cash offer and a listing price and timeline estimate from a real estate agent, then you can decide which is better and if you should spend time and money on the listing or save time and the commission on our cash offer.
Also keep in mind that savings not only applies to the realtor commission, if you sell quickly, you also realize additional savings because you won’t be left to continue to pay the monthly bills while holding onto the property for months, waiting for a buyer.
Real estate agents understand that your must appeal to buyers; therefore, they set about advising you on the steps to take, which all come out of your pocket. Unfortunately, all those agent recommendations can be expensive, prepping the property for showings and professional photography for marketing before the home is ready to list. Add to this the costs of listing, passing inspections, and closing costs. But, on the other hand, it will not cost you a thing upfront to sell your home to a Kansas City property wholesaler, like those at kcmoHomeBuyer who require none of the above.
There are critical differences between property wholesalers like kcmoHomeBuyer and Kansas City real estate agents, which can greatly benefit homeowners in situations that do not fit the typical mold for a conventional listing with a real estate agent. We recommend if you are trying to decide which is for you that you get an offer from a local, experienced, professional wholesaler and also have a Realtor give you an estimate of price, costs, and times. Then you can compare . . . here at kcmoHomeBuyer, we can give you both.
Find out for yourself today with no obligation how the professional home buyers at kcmoHomeBuyer can help you. Just fill out the form below to get started.
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It was great not having to go in and clean up that unholy mess and worry about disposing of everything. I hope you guys make a good sale on the property, I’ll be only too happy to refer you to others.
Thank you, Scott, that house has been a stone around my neck for the past ten months. I’m so glad that your mom friended me on FB and got things rolling, I’ve had a lot of deaths in my family in the past seventeen months,(my father, my estranged husband, and my only sibling–my brother. I have been swamped trying to deal with it all simultaneously. You guys took me by the hand and drug me through what needed to be done, and I appreciate that.