Ok disclaimer:  This is a short vent and at the same time a challenge to us to keep improving ourselves!

Let’s be fair, sometimes the agent is out of town.  Or their phone broke.  Or maybe an emergency came up.  We get it, life happens and we totally understand that.  Some would argue that someone in a scenario like that should leave some kind of message stating as such however there are arguments to both sides of that debate. 

BUT, what seems to happen far more often is the agent is simply non-responsive.  We are not talking about getting back to you one or two days later.  We are talking about not responding at all and you know they are around.  Professional?  We think not.  Maybe they are just super busy.  Welcome to the club.  As professionals, we have to find a way to improve that.  Especially when we are talking about offers and earnest money.

The kicker for me was when we won a bid on a property and we never, not once heard from the listing agent.  We had to follow up with the office just to get addendums and after a few days of waiting we finally got them.  We wondered if we really had anything but eventually they did.  Sadly once earnest money was delivered, it went silent again.  We ended up not moving forward due to inspections however then getting earnest money back was no less an issue.  It’s one thing to be busy.  It’s another to be too busy to tell people where their money is.  We don’t anyone who appreciates that scenario.

Real Estate is a smaller world than many people realize.  It is not terribly hard to find out if someone is around and simply not returning your call.  If as a listing agent you are not returning calls or at least having an assistant return them, shame on you.  Yes we are being up front however we have run into this far too many times.  If you don’t have time, just say you don’t have time right now but you will get back with us.  It’s not too much to ask.  What makes it worse is when multiple colleagues share the same view.  It is truly a small world sometimes.

If you don’t have time, please reconsider if you should be listing properties.  As Buyers, we count on and depend on at least a reasonable level of communication, especially when we win a bid!  With all these time sensitive addendums with REO’s, time and money is truly at stake on every deal done regardless of whether the Buyer is a home owner of investor. 

All you have to is respond when we reach out to you.  It’s all we ask.  In the meantime, we must always look at ourselves to ensure we don’t make the same mistakes we vent about.  Works both ways!

‘Way off’ varies per market so I will use Atlanta as an example.  Adjust accordingly for your market.

In Atlanta, if an ARV (after repaired value) for a property is off by up to 15-20k depending on the area, most Buyers aren’t going to bark too much.  Unless you are in a low end neighborhood, sub 50k in value, it’s not unusual to see a range of ARV’s vary by a few grand.  Up to 20k may be typical as you get to the higher priced homes, approximately 250k and up in Atlanta.

So here is the example of what typically happens

• Deal comes in at 50k purchase price, 35k rehab, ARV of 135 – 62.9% LTV – very reasonable
• Comps are run and there are five comparables.  All comparables are move in ready, finished homes with prices between 95-105k except one at 135k.
• Wholesaler puts ARV at 135k yet all homes are similar. 

And here is where the break down happens…why did one house sell for 30k more than all the others?  The answer 99% of the time is there is something unique about that property that the others do not have.  Examples in our market are:

• Additional acreage
• A special view
• Additional detached garages for toys
• Wrap around driveways
• Water view or waterfront with dock on a lake
• Offstreet parking if in the city
• An extra bedroom/bathroom combination
• The quality of the street vs the others
• High end custom finishes out of character with the neighborhood that someone was willing to pay for

If you remove the special factor(s) from this one high comp, the ARV drops in line with the other properties.

Therefore, if you run comparables and find a property that sticks out as a sold, investigate further why before assuming that is the new ARV.  This allows you to present your comps in a light that a Buyer can respect and appreciate and not add you to the list of wholesalers who send them ‘junk’ as I hear it called so often.

By presenting it in this light, the Buyer can decide if he wants to take on the extra risk to duplicate the high end comps and pull it off if the potential is there.  Or if the extra feature is not there, it shows your Buyer you are paying attention to detail at a level that can be respected whether it is a deal for them or not. 

Remember Buyers like to assume the worst case for ARV and not the best in most cases that way if we get the higher figure, it is icing on the cake.  No one likes to speculate on ARV and lose.

Lastly, if you are forwarding someone else’s deal to your Buyers list, verify the comps, verify the comps, VERIFY THE COMPS!  Don’t take them at face value.  I tell every wholesaler that asks me to send their deals out to my list this and if I don’t agree with their comps, I will tell them.  If they sell it anyway, then more power to them but putting a deal that doesn’t work for you out there is not something I think any wholesaler should do.

Be conservative and make a deal today!