And what even is a ‘wholesaler’ anyway?
There is no one size fits all when it comes to selling your home. Many people are aware of two main ways to sell their house: For Sale By Owner (FSBO), or listing it on the market (the MLS) with a real estate agent. Wholesalers, however, can provide a third option. Perhaps the least understood of all the above mentioned options, each one is viable, and can work for the right person in the right situation.
In Illinois, wholesalers who complete more than 1 ‘assignment of contract’ (ie: ‘wholesale transaction’) every 12 months must also be a licensed real estate agent. Though they do not necessarily act in the same capacity, wholesalers can provide similar services. While traditional real estate agents earn their commission from the sale of your house–based on a previously agreed upon percentage in your listing contract–a wholesaler typically earns their commission from the buyer’s side. A good wholesaler will disclose to you the following items: Who they are, what service they offer, that they are a licensed real estate agent, what costs/fees are involved in the process if any, and how the process works.
Personal preferences, unforeseen circumstances, or the home’s condition can mean that listing the home on the Chicago real estate market isn’t the best option. Many sellers would prefer to skip the hassle of the listing process altogether. Vacating your home for showings and open houses means you’re on the schedule of your potential buyers for an indefinite amount of time. You’ll also want to keep your house in tip top shape throughout this process—clean, organized, and in repair. For some, family illness or an unanticipated job relocation has forced relocation, and the purchase of their next home is contingent on the sale of their existing home. This means they may make an offer for your home based on the fact that their home sells first. Other sellers are unable or unwilling to put the work into the home required to bring the highest profit. This is where a wholesaler can provide a lot of value.
A wholesaler will walk through your home, estimate the repairs needed, make you an offer, write up a formal purchase contract, and then try to find the perfect person to buy your house. This ‘perfect’ person is usually a rehabber, house flipper, investor, or developer. Someone who has access to cash, is flexible and able to close on your timeline, and who is very comfortable with buying and fixing up properties that are not in the best shape. Essentially, the wholesaler acts as a liaison between you and that ‘perfect’ person, or end buyer. Wholesalers typically have a large network of other real estate investors they work or partner with on these types of transactions. While the wholesaler him/herself may not close on the purchase of your house, he/she likely knows the perfect person who will.
One of the misconceptions people have about real estate wholesalers in Chicago is that they rip off home sellers. In actuality, a good wholesaler will lay out the details of every number used to reach an offer, and then compare it to the realities of listing the property. This allows you to make an educated comparison and decide which is best for your situation.
Another misconception people have about real estate wholesalers in Chicago is that the arrangement is only in favor of the wholesaler. On the contrary, the advantages that wholesalers like those at Property People provide to home sellers are many—for example, taking over homes from owners who are facing the destruction of their credit because they can’t sell. In addition, if you dread the inspection phase of the sale, a wholesaler can take on the risks of the repairs, eliminating any legal risks from disclosure laws that can come back to bite sellers. Another advantage for sellers is the flexibility to close with Property People on the most convenient date for your plans.
Bottom Line: You have a lot of options when it comes to selling your home. A little due diligence goes a long way. Take time to research the best option for YOU. Whether that be listing it on the market with a real estate agent, working with a wholesaler, or selling it yourself!