How homeowners can avoid being taken over by wholesalers
Posted On July 11, 2023
The real estate game can be really complicated in these times. Real estate wholesalers are taking advantage of many homeowners. When wholesalers advertise their so-called great deals, they may be using values that are not accurate. Beware of investors taking Zillow estimates. Those types of estimates are where you would not want to buy an investment property. Make sure the properties you are comparing are recent and in the general area of the property in question.
Another value that wholesalers are using is the property tax record. Property tax records mean nothing right now. The values listed for the property at your county tax assessor’s office are too inflated. The numbers you are looking at are what the property was worth before the mortgage collapsed. Those values will not return for another 7-15 years.
A good investor cannot accurately say that those properties will sell for that price now. Your county tax assessment office will not adjust the assessed value of properties in their systems because it would mean less tax revenue for them. I went to my tax assessment office and requested that my home’s appraised value be lowered to save a few dollars on my taxes for the year.
Unlike many others, I have access to the multiple listing service available to real estate agents. Having access to the clearing tool within the service gives me a very good idea of what the property is selling for in a specific area at a specific time. Therefore, I am sure that I will never get scammed. I once knew of a wholesale company that was selling properties for twice what they were actually worth because they used tax assessment values instead of current offsets.
Wholesalers are also marketing foreclosed properties using the last sale date. In the marketing pitch, they may tell you what price the property in question last sold for. These are not good numbers to go by because this was during a time when anyone could get a home loan, even Charlie the Tramp at his local store, and because of this, people were selling properties at ridiculous prices.
Be smart with your purchases and don’t let wholesalers lure you in using figures that aren’t likely for that particular property for another ten years. All it takes is a little research and a reliable comp service like realquest or siteX.