The first question we usually get is, “what’s my home worth?”
The short answer, what someone is willing to pay. But there understanding what goes into that is key.
I’ve heard people use the terms retail and wholesale, but how do those terms apply to homes? In a nutshell, retail is the highest price you can hope to achieve when selling your home and wholesale is a price that a third party would pay who wants to buy your house with the sole intention to make a
Homes that sell for retail prices are generally listed on the MLS (stands for multiple listing service or open market). Typically the seller would reach out to a real estate agent who would then look at the house, and given their knowledge of the area and other homes that are currently listed and have recently sold, set a price to list the home at.
Other agents and buyers would see the listing, set up showings, and submit offers. Depending on a variety of factors your home could sell in as little as 1 day up to 5, 6, 7 months or possibly not at all until you drop the price or the market changes.
This can cause a huge headache and financial burden for someone looking to get rid of their property ASAP!
Wholesale on the other hand is when you take away that entire sales process and sell directly to a person, usually an investor or sometimes a person called a wholesaler. It’s no secret that an investor is there to make a profit and therefore can’t pay retail value for your home.
Retail Offer Vs. Wholesale Offer
So if the retail offer price is higher than the wholesale offer price, why would I ever accept a wholesale offer price?
There are a dozen or more reasons why, so I’ll explain a few of them.
First, let’s look at everyday life. We buy products from stores at retail almost every day. Most stores don’t make the products they sell so they buy from a wholesaler or distributor. That distributor also doesn’t make the product, they instead buy from manufacturers who do.
There are of course some exceptions to this rule, but this is generally how it goes. It works because at each level the business specializes in what they do. The manufacturer specializes in making the product, the wholesaler in storing and shipping the product, and the retailer specializes in bringing in customers and selling the product.
Which leads me to the biggest reason people choose to wholesale their home; time and convenience. Just like the manufacturer who makes the product, they don’t want to take the time and energy to speak with all of the stores that sell their product. They would rather make as much product as they can and sell to one person who then deals with the hassle.
Who wants the stress of dealing with open houses and individual showings, having to leave your home for 30 minutes to an hour at a time and taking your pets with you or making sure they are fine with strangers in the home? And you do all of this with no guarantee of when or how much your house will sell for. By speaking with us we can give you a fair cash offer without all of the disruption and on a timeline that works for you.
We Buy Houses In Any Condition
The other popular reason someone might forego the open market is the condition of their home. Homes listed on the MLS that get the highest offers are marketed as
If people see your home and it needs work or updating they won’t pay top dollar for it. Your home could sit and possibly not sell or sell at a huge discount anyway. Even worse, if your home is in really bad shape the bank won’t loan the buyer money to purchase your home. Most buyers need banks to finance the purchase of a home. This will leave you having to fix the issues which can cost a lot of money upfront or giving the seller a price reduction to cover the costs.
Most sellers don’t have the money and don’t want to deal with the trouble of fixing a home so they will likely just avoid your home in the first place. That’s where we come in. We have the money to purchase your home without the banks and the money to do the repairs. Where most people walk away, we see the opportunity to make a nice home for someone.
What’s the difference between a wholesaler and an investor? Sometimes the names are used interchangeably because from an outside perspective they do a lot of the same things. A wholesaler is like a distributor. They buy houses with the sole intention of making a profit by selling it to another investor who will also expect a profit. We are not wholesalers by trade, we are investors. By working directly with you we are able to create the best possible deal.
How can I tell the difference between a wholesaler and an investor? That’s a great question. Both will write up a contract to buy your home without typical bank financing, usually in cash. The biggest difference is that most wholesalers have no intention of actually purchasing the home.
They will instead try to find someone (usually a true investor) to pay them a finder fee and assign the contract to that person. To spot this, they will generally try to get you to agree to very long inspection or “due diligence” periods so if they don’t find a buyer they can walk away. They may agree to a shorter period but put down very little or no deposit. This way if they can’t find a buyer, they can simply walk away leaving you empty handed with a house left to sell.
What Our Offers Look Like
Again, we craft every deal to your individual needs. But our typical offer is a 30-day close, with a 10 day due diligence period, and a deposit of 1-2% of the purchase price. If you have any more questions, please feel free to submit a contact form so that we can be in touch with you.
