To find the perfect house, move away from the herd and the MLS
The housing market is hot...prices were up 12% in Licking County in 2020. High demand and low inventory have created huge challenges for would-be home buyers as homes go into contract within days. What's worse, many homes are selling over the asking price, perpetuated by ultra-low borrowing rates. Buyers are willing to ignore any sense of reality and even pay over the appraised amount, creating zero equity. It is hard to predict when the perfect storm of low inventory and low rates could end, but if you are looking for a good deal, it may be a while before under-market prices hit the MLS.
One of the easiest ways to find a "deal", usually an off-market property is to link up with real estate wholesalers.
What is a wholesaler? In the property world, this is a company or individual who has secured a contract a buy a home directly from a seller and is "selling" or assigning the contract to another person or company, usually a real estate investor. At closing, the seller gets their money, the investor acquires the property, and the wholesaler gets an assignment fee. This is different from the MLS where a seller lists the home with a broker, puts a sign in the yard, and realtors "show" the home to potential buyers. The seller normally pays the commission % that is usually split with the selling and buying brokerages in the transaction.
Why use a wholesaler? The investor gets an off-market property, normally under retail price such as the MLS, and avoids the retail process. Of course, it's not guaranteed the price will be better with a wholesaler....you could pay more, but that's up to the investor to check and negotiate. Keep in mind; most wholesale deals require the investor to pay cash and close quickly, usually in 2 weeks or less. Also, the buyer needs to do all the due diligence, including inspections and title searches. One other important fact: Wholesalers may not be licensed real estate agents and legally cannot represent sellers in a transaction. A major advantage of using a real estate agent is the agent owes you duties as a client, including loyalty and confidentiality. The duties are the core of ethical responsibilities that all licensed agents must adhere to under Ohio law. When you buy from a wholesaler directly, you may miss out on the benefits licensed agents provide.
