I recently sold a home in Oshawa and the story behind another similar home in the neighborhood had me digging in to how “flips” work. I thought I would share my research into what happened to the home down the street from the one I was asked to help sell. I am going to keep the details about street and neighborhood in the dark, meaning only to give my readers a glimpse into using “wholesalers” to buy a home.

The home I sold was in need of work. The owner was elderly and had kept the home clean, however it needed upgrading such as windows, furnace, kitchen, baths and flooring. We ended up getting a price that was higher than the expectations of the seller. The home sold in the higher $600,000’s.

I received a call from someone I know involved in “wholesaling” when I was marketing the above property asking what range I felt the home would sell in. He proceeded to share that he was working on an “off-market” property.

Let me stop and offer a couple of definitions to clarify some of the above terms:

Wholesaler (also known as Retailer) – is a business strategy in which a wholesaler enters into a contract on a home before eventually selling the contract to a new Buyer. The wholesaler acts as an intermediary, selling the property on behalf of the property owner and keeping the profit.

Off-market property – a property sold not being introduced to the market, being sold with no exposure to Buyers.

The off-market home that the wholesaler who called was working on, was a similar property that I was selling in a very similar condition. In the end the wholesaler secured the property for $100,000 less than the Seller received for the home I was selling.

The first, really big question is “why would someone sell their home for $100,000 less than it is worth?” If you google wholesalers the pitch they make is, any condition, quick closings, foreclosure and financial problems. Offering, no hidden fees and no commissions, what the companies look for are homeowners who have a need to sell quickly and offer a solution to their problems. However, for many this comes at a cost. Sales pitches like “Our goal is to make life easier and get you out from under the property that’s stressing you out” playing on the emotions of home sellers under some form of stress. The list of reasons goes on offering to pay off back property taxes, and debt relief. What the wholesalers play on is a quick fix to a stressful situation.

In many cases (as described in the definition) the wholesaler will not complete the sale themselves, they will sell the opportunity to close on the property at a higher price. The home above I mentioned that sold for $100,000 less than the one where the Seller had my representation has a very interesting sales history. The home was first sold in Jan/21 for $300,000 and then in April/21 for $465,000 and again in Feb/22 at $575,000. The home was sold off-market each time.

It would take a magician to determine how a home would sell 3 times in 13 months with an increase of $175,000 and still sell in February 2022 for $375,000  under the average sale price for a semi-detached home in Oshawa!

If you are planning on selling a home I would suggest interviewing several different Realtors, and interview one of the wholesaling companies if you are curious. I am certain you will get a wide range of selling prices, marketing methods and offers to “put more money in your pocket” by going with one or the other representative. Just make certain you do your homework before you decide to work with someone.

I learned early in my career, that sometimes when things seem to good to be true, they are often followed up with a smell you only encounter when you walk past a cattle farm.

If you have any questions, or you need a realistic, honest value on your property where you won’t leave “money on the table” when you sell I can be reached at lindsay@buyselllove.ca

Reasons to use an Oshawa, Whitby or Clarington agent to sell your home.

1. Access to the MLS system to market to 64,000 GTA agents.
2. They are licensed by RECO and abide by their code of ethics.
3. They pay for the costs of marketing, regardless if the home sells.
4. Experienced negotiators.
5. They are working in your best interests.
6. Their work is covered by liability and errors and omissions insurance in case there is a legal claim.

Reasons to use a Wholesaler or Retailer to sell your home.

1. Fast closing.
2. No work needed to be done for the sale to take place.

If you have any questions, or you need a realistic, honest value on your property where you won’t leave “money on the table” when you sell I can be reached at lindsay@buyselllove.ca

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