Wholesaling Real Estate: a Step-by-Step Guide
Real estate wholesaling is a specialized method for buying in almost all real estate markets. Some may refer to this as flipping houses. This process involves negotiating a discounted purchase price on a property and signing a contract with the seller. If both the wholesaler and the seller sign the contract, the wholesaler can assign his/her interest in the property. Real estate wholesale buyers are landlords or rehabbers.
There are three main steps in any successful wholesale real estate deal.
Identify motivated sellers and negotiate a low sale price for the property
Put the property under a transferable purchase contract and then check the property’s title
Identify potential buyers to assign the contract
How to wholesale real estate
Generate motivated seller leads
The real estate wholesale deal begins if you have the ability to generate quality seller leads. To get leads to execute a marketing campaign that targets property owners. Motivation is very important as it will boost the seller to sell the property at a discount price. Without motivation, the plan will be a failure.
It’s important to pre-screen sellers to determine their motivation. Prepare a list of questions to ask your sellers. Every seller is not a qualified lead. The person who responds to your marketing will not be the right person for your real estate wholesaling.
Tips for pre-screening
Stay in control of the whole conversation
Just know about any outstanding mortgage balances.
If the seller expresses more about the look of the house and the money they have spent for maintenance then they will not be the motivated sellers.
Make an offer to purchase property
Making an offer will be useful for both of you. The seller will receive a price at closing so they will be happy and you can buy the property at a cheap price. In today’s market, you must make an offer to the seller the best price than your competitors. Your contracts are short-term agreements so you can move on quickly even if you pay a high price.
Follow up with sellers
Suppose the seller doesn’t accept your purchase price then don’t just leave them. Follow every seller and make an attractive offer. You must create a strong connection that will convert sellers without spending any additional dollars. The campaigns include phone calls, mail, messages, and social media.
Closing the deal
Make the seller sign your contract for the lowest price. This is a somewhat difficult part of a wholesale transaction yet you can market the contract and assign it to a cash buyer.