Should I Work With a Real Estate Wholesaler?

If you want to have a better chance of your deal getting to the closing table you will want to run as fast as you can from real estate wholesalers. They are not real buyers. The normal wholesale model is they either tie your home up and scramble to find a buyer or they try to reassign the contract to a random person you don’t know or get to approve. However they do it they not what we call the “end buyer”

Should I Work With a Real Estate Wholesaler?
Should I Work With a Real Estate Wholesaler?

The Downside of Using Real Estate Wholesalers: Why They’re Not Your Best Option


In the world of real estate, there are many ways to buy and sell properties. One method that has gained popularity in recent years is the use of real estate wholesalers. However, this approach is fraught with pitfalls and challenges that can make it a less than ideal choice for many buyers and sellers. This article will delve into the reasons why using a real estate wholesaler can be a horrible idea, highlighting their inability to close deals and the difficulties in working with them.

What is a Real Estate Wholesaler?

Before we delve into the issues, it’s important to understand what a real estate wholesaler does. In essence, a wholesaler is a middleman who finds distressed properties or motivated sellers, gets a property under contract, and then sells that contract to an end buyer, usually a real estate investor. The wholesaler makes money from the difference between the price they contracted with the seller and the price they sell the contract for to the buyer.

The Unreliability of Wholesalers

One of the biggest issues with wholesalers is their unreliability. Unlike real estate agents, who are licensed professionals bound by a code of ethics, wholesalers are not regulated. This lack of regulation means that they are not held to the same standards as real estate agents, and there is no guarantee that they will follow through on their promises.

Wholesalers often fail to close deals because they are unable to find a buyer for the contract. They may overestimate the property’s value or underestimate the amount of work needed to make it marketable. If they can’t find a buyer willing to take on the contract under these conditions, the deal falls through, leaving the seller back at square one.

The Difficulty of Working with Wholesalers

Working with wholesalers can be a frustrating experience. They often lack the professionalism and expertise of real estate agents. Their primary goal is to make a profit, and they may not have the seller’s or buyer’s best interests at heart.

Communication with wholesalers can be challenging. They may not be readily available to answer questions or provide updates on the status of the deal. This lack of communication can lead to misunderstandings and delays, adding to the stress of the real estate transaction.

The Lack of Transparency

Another issue with wholesalers is the lack of transparency. Wholesalers often use assignment contracts, which allow them to sell the contract to a buyer without the seller’s knowledge or consent. This can result in the seller receiving less money for their property than they were expecting, as the wholesaler takes their cut off the top.

The Value of a Real Estate Agent

In contrast to wholesalers, real estate agents are licensed professionals who are regulated by state laws and bound by a code of ethics. They have a fiduciary duty to their clients, meaning they are legally obligated to act in their clients’ best interests.

Real estate agents have access to the Multiple Listing Service (MLS), a comprehensive database of properties for sale. This allows them to accurately price properties and find potential buyers. They also have extensive networks of contacts in the real estate industry, which can be invaluable in closing deals.

Agents are skilled negotiators who can help ensure that you get the best possible price for your property. They handle all the paperwork and logistics of the sale, making the process as smooth and stress-free as possible.

Just Avoid Wholesalers Whenever Possible

While the idea of using a real estate wholesaler may seem appealing at first glance, the reality is often far from ideal. The lack of reliability, difficulty in communication, and lack of transparency can make working with wholesalers a frustrating and unprofitable experience.

In contrast, using a real estate agent provides a level of professionalism, expertise, and peace ofmind that wholesalers simply can’t match. Agents are committed to their clients’ best interests and have the tools and resources necessary to successfully close deals. When it comes to buying or selling real estate, your best bet is to work with a licensed real estate agent.

In the end, the choice is clear. While wholesalers may promise quick sales and easy profits, the reality is often far different. The challenges and risks associated with using a wholesaler far outweigh any potential benefits. On the other hand, real estate agents offer a reliable, professional, and transparent service that ensures the best possible outcome for all parties involved.

So, before you consider going down the wholesaling route, think twice. The path may be fraught with more pitfalls than you anticipate. Instead, consider the safer, more reliable option of working with a real estate agent. It’s a decision that could save you time, money, and a great deal of stress.