need help understanding a realtor's role in a wholesale deal

The realtor basically represents you in the case of a wholesale. Besides a licensed contractor can only make the second party interested feel more comfortable. Don't feel like their cutting into your profit because their not. Why? Because you've already stated in contract what you wanted to walk away with. Put it like this the realtor saves you from doing a lot of paperwork, and you get to avoid the headache.

How does the realtor make a profit though? What percentage is given to him/her of the profit YOU make?

I always wanted to know that.

My only concern would be when it comes time to present the offer....... Will the realtor discourage this kind of offer to the buyer , etc ?

You would think not , because everyone will get paid at closing as agreed.

If the realtor is on your "dream team" they should be working on your side. They should just take the offer to the seller of the home on your behalf. YOUR realtor knows that you deal in volume...so even if their profit is low on the current house...the overall profit they will make working with you will make it all worth while.
Now if you find out that your realtor starts whimping out on you...get rid of them. You need someone serious about the business and not afraid to go out there and place offers that are really low.

where does the realtor make their money? If I re-sell the house to an investor with a higher amount, where does the realtor come in? Is the realtor suppose to help you find the house? I'm still having trouble understanding. sorry everyone if I can't seem to get this

So you (the wholesaler) do the work finding the house? Or does the realtor do that work? If the realtor does that work, does that mean he/she deals with you because you are finding the buyer? Sorry for the confusion

I think you are asking where does the realtor make their commission? The seller pays the realtors commission on any transaction. If the realtor has a listing on the MLS and you make an offer you are the buyer. If you are doing a deal back to back meaning you buy it and then re-sale it on the same day you would not need to pay the realtor out of the deal on the first half. If you use the realtor to find your end buyer then you need to pay the realtor for the second closing as you would be the seller in that closing. If you found your own buyer for the second closing then you would not have to pay the realtor. That is my understanding. I am new too. So someone can correct me if I am wrong.
Glad to share here and hope to learn by explaining it to others. I have noticed the best way to learn something is to teach it. So I am trying to learn too. Good Luck to you Buffs28.

You both look for deals. You go out and find FSBO's, preforeclosures etc...you can either contract it and handle it all yourself and not use your realtor or somehow bring your realtor in on the deal.

You can tell your realtor what to look for on the MLS for you. Like houses that have been on the market for more than 90 days, foreclosures, short sales, handynman specials,need to sell, discounted, just give your realtor a bunch of keywords like that...she can pull many that will fit that description and you can have her to place the offers for you.
She will make her profit from the seller of the house...you make your money from the end buyer that you find.

Some wholesalers even give the realtor a little extra incentive....maybe had them an extra $1000 or so on top of the commission they will make for being the realtor that handles the deal.

thank you all this has been so helpful and is so helpful. what a blessing and a treat. I am blown away at all the help on this site.

Thank-you for the post. I was asking myself that same question.

I call a we buy house add that I found seaching the internet and I introduce myself and I asked him if he had any property that I could help him move. It turn out that he had a property in Manhattan. Its a 10 unit Single Room Occupancy that needs rehab work. I said cool e-mail me all the info and the photos so that I can e-mail to my clientel. Then he tells me he is a broker. I said if you are a broker how am I gonna get compensated. He tell me from the buyer. I'm like "wow" we live in cut throat society he could just say hell with me. I received some free information from Eric Medamar who is a whole seller guru and he said that the only way you could get paid if a property is listed with a agent and you find it is to have the agent paid you a marketing fee, and you have to have the website to be able to use this strategy. I think Dean Graziosi supply the appropriate document to make this possible.

I'm learning like everybody else and you have to apply a stick to it concept in order for anything to work. Also in this business get comfortable in being uncomfortable. Try talking to at least 15 people a day. Because someone always know somebody who is in a distress situation and can help you out.

Thank you for the great information. I could use more connections between how to have the realtor find me properties as well as myself. I loved the keywords for the MLS site. Any other tid bits?

I am trying to connect that loop; it's pretty big. Actually, just finding a realtor at this point is pretty big. I had one and then "she thought about it more" and didn't want to represent me. Bummer so back to the calling board!

You need a realtor if you want a realtor. If you feel you can go without one, more power to you.

Realtors are paid from the sale of the home in the form of a commission; generally up to 6% of the purchase price when shared with the listing agent

When the sale is from a direct buyer or investor, it can and has been known to be higher. That is predetermined and genenrally preferred

Realtors are generally not impressed when an 'investor' tells them "I deal in volume" until they personally witness such transactions. There is no profit to be made, and just because you want to put in 25 lowball offers does not assure you will get back even 1/4 of them accepted and in most realtors' eyes, is a waste of time. There are some that have the time and patience to present any offer. Stick with them if they fit into what you're looking for.

There are some cases when the buyer has to compensate their agent. That is normally when we deal with cash buyers. Cash "I can close in one week" buyers

However,

To just dismiss a realtor because they don't agree with your lowball offers might stifle your further progress. A realtor,....a good realtor knows the market and while may hesitate to present multiple offers ask the reason because it may be a strong valid one;
1. They know the neighborhood
2. They know the owners
3. They know the bank
4. They know the realtor(s). Realtors have the ear of the seller and can make or break a deal. And we speak to other realtors, so don't come across as some ho shot investor who's actually a newbie; word gets around

Agents are not supposed to accept anything above what they are legally required to receive without the knowledge of their broker; that is call kickbacks.

I really think you need to get an agent for now.

Wow, what a great post. Thank you very much for taking the time to write. I am continuing to call realtors but I am very nervous. I'm tired of almost being laughed at by these people and like anyone, am not crazy about putting myself in the situation time and again. I know one is out there but I sure hope it is soon. Again, thank you for the wonderful information.
Clint

Be sure to check out Bill Raffety's posting, he has great info on Realtors!

I have a question that I think I have the answer but would like to make sure.

I met a cash buyer the other day that said that he will buy at 60-65% of ARV(after repair value);as an example, is he saying that using $100k fmv if I locked it at $60k ARV leaving 40% equity that he will buy it or he's looking for 60-65% equity built in ARV?

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Chris, I have not been able to locate the post you are referring to. I would love to find it though!

Thanks!
Clint

I was just wondering, when building a buyers list do you inform your realtor as to why you need the info your requesting from him?

Ex.. If requesting a list of cash properties, do you say why?

The reason for this question is, are we giving the realtor an ideas to wholesale the properties himself?

Going to have a conversation with what I hope to be my "Dream team" Realtor. Was wondering what should I say?. Going to look at "Bill Raffety's posting" to find out more. Any other advice with be greatly appreciated.

Josh

wht hes looking for is that u get the property for 40k or 45k and he wants the other 60 65
so ur example
property:100k
he wants 60% equity he wwants u to get it for 40000 i think thts the way to
explain it.