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Need to sell your home? Beware of wholesalers, warn local agents

Protect your interests and do your research before making any deal
Andra Arnold_Dec Spotlight image

Right now, many are not working, there is uncertainty in the economy and it’s possible that Guelph could be going into lock down again. Unfortunately, more homeowners may find themselves in the position of needing to sell.

“We also haven’t yet seen the repercussions on the call of loans and deferred payments that we saw earlier during the first bout of Covid,” says local real estate agent Andra Arnold. 

What Arnold and her colleagues don’t want homeowners to do right now is to put their trust in those who are simply looking to take advantage. 

Some real estate wholesalers operate by profiting off the backs of cash-strapped homeowners. They contract a home with a seller, then set out to find an interested party to buy it. The wholesaler then contracts the home with a buyer at a higher price than they did with the seller, and they keep the difference as profit. 

If you’ve ever seen signs or ads that read “We buy your home for cash”, that’s a wholesaler. 

“What we want to advise people is please, please, please don’t do that. They’re not protecting your interests and what they’re about to do is make a large profit on your loss,” the real estate agent warns.

To illustrate, in October of this year a home sold for $380,000. The bungalow, which sat on a 50-ft. lot, was renovated and then sold for $650,000. 

“That was at the detriment of somebody who really had their life savings in their home. They had lived there for approximately 25 years,” says Arnold. 

There is absolutely nothing to be ashamed or embarrassed about if you are facing financial challenges, she says. What you want to do—and what you deserve—is to get fair market value for your home. 

Some may be concerned about working with real estate agents because they’re worried about commissions and costs. What Arnold counsels is that rather than deal with a wholesaler, you should talk to somebody, because there are a lot of people out there who can help.

Typically, when you work with a real estate agent and you’re dealing in an open, free market, the buyer and the seller each have to give a little. In the end, both parties should feel as though while they may not have received everything they wanted, they are satisfied with the outcome. 

“In a wholesale situation, you absolutely have a loser,” says Arnold’s colleague, Joe MacDowell. Wholesalers do not give the homeowners they’re dealing with a fair shake when it comes to negotiating. 

The agents are sensitive to how difficult a time this is for many. “Right now, people are just feeling the stress. What I want people to understand is that we’ve been in this situation and we’ve helped a lot of people who have been in this position,” says Arnold. 

Real estate agents have an obligation of confidentiality. It’s also their responsibility to get the most amount of money for their clients, and to help prepare their house in order to do so. 

If a homeowner happens to be in financial trouble, a real estate agent can find people who can help them. Says Arnold, “There are so many resources out there. Homeowners shouldn’t be worried about the process or what people are going to think, as long as they’re hiring professionals that can help them. Call somebody that you trust.”

The demand for homes is out there, so don’t sell yourself short or allow someone else to profit from your many years of homeownership. 

“Don’t wholesale your home before talking to a professional real estate agent in your area. Don’t call those numbers, don’t answer those ads. There’s a reason why they’re doing this, buying your home for cash, because they’re going to make more cash off your house, especially right now in a seller’s market,” says Arnold. 

“There’s no way in an environment like this when the supply is so small and the demand is so high that anybody should be in this situation and not taking advantage of the true market value of your property. Please don’t sell your house wholesale, especially in a seller’s market.”

Says Arnold, “My heart breaks seeing this. I don’t think you should ever win at somebody else’s loss.”

Andra Arnold can be reached at 519-766-6041 or via email at andra@cbn.on.ca