Ok, I got a great question recently and I wanted to share it and the answer with you. It’s not often asked or talked about, which makes it perfect for a blog post!
So, the question is: Do you do showings — like an open house approach — when wholesaling?
See, interesting, right?!
Well, my answer: Not so much.
See, I might schedule to have two potential buyers at the house at the same time or overlapping, but… what I discovered a long time ago is if you are actively and overtly — not covertly — looking to get investor-buyers to compete with each other for your property, you will become extremely unpopular quickly.
Like the old “Sell Your House in 9 Days” book, which was all about using a silent auction to get a house sold quickly. You’d blitz the market with advertising, use an open house, have a bid sheet on the counter, and literally do a silent auction while the house is open with buyers coming in.
But those are retail buyers, not investor-buyers.
I tried that open house/silent auction thing a couple of times in Florida on junkers with investor-buyers… it didn’t go well.
Maybe others have a different experience, but mine was not good…
I had a couple of buyers who I had sold houses to before, and when they got to the house and realized what was going on, they pulled me aside and said, “Dude, you ever do this to me again and… !!”
I guess I was still pretty naïve then.
But, there’s a kind of loyalty that goes two ways, right?
So, as a wholesaler, I have a buyer who buys from me repeatedly. He’s very loyal to me. And I’m very loyal to him. As soon as I do one of those open house/silent auction things, that loyalty is in the wind… he’s offended, if not ticked off, because we’ve already agreed that when I have a good deal, I’m going to bring it to him first.
And now I’m doing this. :/
No wonder he’s ticked.
So, what should you do?
Well, don’t get these buyers bidding against each other. You just do the “highest and best.”
You say, “Look, I’ve got several buyers interested in this deal… please get me your highest and best by end of business Friday.”
And then take the offer that best suits you.
DO NOT go say, “Hey, I’ve got $140k here. Do you want to top that?” And if that buyer goes to $150k, don’t go running back to other buyers asking if they want to top that and on and on.
You’re going to lose both buyers. They’re going to be so mad.
Just put yourself in their position… wouldn’t you?
So, pass on the open houses, and silent auctions when wholesaling. IMO, it’s just not the way to go.