You got a letter or a text about your house. Someone wants to buy it for cash. The offer might sound decent.
But there is a catch you need to know about. That person might not actually be buying your house. They might be a wholesaler.
How Does Wholesaling Work?
Wholesaling is a part of real estate most homeowners never hear about. It works like this:
A wholesaler puts your house under contract at a low price. Then they find a real buyer who will pay more. The wholesaler keeps the difference. They never actually own the house. They just control the contract for a few days or weeks, then assign it to someone else for a fee.
That fee is money that could have gone to you.
What Does a Wholesale Deal Look Like in Real Life?
Here is how it plays out. A wholesaler offers you $80,000 for your house. You say okay because you just want to be done with it. They sign a contract with you.
Then they find an investor who will pay $100,000. The wholesaler assigns the contract and walks away with $20,000. You got $80,000. The real buyer would have paid you $100,000.
This is why wholesale offers are lower than direct buyer offers. The wholesaler needs room in the middle to make their profit.
Is Wholesaling Always Bad?
No. Sometimes a wholesaler is the only person who shows up. Sometimes you just need out fast and do not care about the gap. Sometimes the house is in rough shape and no one else will call you back.
But you should know what you are agreeing to.
How Is Tennessee House Partners Different From a Wholesaler?
We are not a wholesaler. We are the actual buyer. We use our own money. We close on the house ourselves. We do not assign the contract to someone else.
There is no middleman taking a cut out of your offer.
If you want to see how our process works from start to finish, read about how the buying process works step by step.
We work with landlords too. If you are tired of tenants and toilets and just want out, you can learn about planning a clean landlord exit without the usual headaches.
Should I Compare a Wholesale Offer to a Direct Buyer Offer?
A wholesaler might still be an option for you. But you should compare their offer to a real buyer’s offer first. You might be leaving money on the table without knowing it.
You can send me the details of your property and I will give you a real number. If a wholesaler already made you an offer, bring it to me. I will tell you honestly if I can beat it or not.
Questions Answered in This Article
What is wholesale real estate?
A wholesaler puts your house under contract at a low price, then finds a real buyer who will pay more. They assign the contract and keep the difference. They never actually own the house. That fee comes out of money that could have gone to you.
Why are wholesale offers lower than direct cash buyer offers?
Because the wholesaler needs room in the middle to make their profit. If a real buyer would pay $100,000, the wholesaler might offer you $80,000 and keep the $20,000 difference as their assignment fee.
Is Tennessee House Partners a wholesaler?
No. We are the actual buyer. We use our own money, close on the house ourselves, and do not assign contracts to someone else. There is no middleman taking a cut out of your offer.