As a real estate wholesaler, you could have many different concerns about the success of your business. Common errors that can sink a new real estate investor include:
- Incorrectly calculating repair costs
- Incorrect ARV
- Misinformation when considering comps
And these are just a small sample of the issues that can tank a deal or even your entire business. But what many investors overlook is that there are four distinctly different types of buyers out there. And it is essential that you know how to identify each type and work in a manner that will result in success with each different personality.
The Four Different type Real Estate Wholesaler Buyers In The World
It is essential that you be able to identify and work with every type of buyer that you come across in wholesaling. Each one brings with it its own challenges and benefits. And you never want to eliminate a quarter of your potential buyers by failing to succeed with a particular type of buyer.
The Inquisitive Buyer
This buyer is going to be a very hands-on person who will require a great deal of your time and attention. But once a relationship has been forged, this buyer can be very valuable. Most of these buyers are somewhat new to the business. They are still learning and verifying the information that they believe to be true.
They ask many questions, but you can use it to your advantage by guiding them in a beneficial direction. But you can’t rush these buyers. So be ready and willing to invest your time.
The best part of these time-consuming buyers is that many other wholesales will not have the patience to answer all of the inquisitive buyer’s questions. And that means that once you develop a relationship, you could have a long-term buyer who is very loyal to you. Look at these buyers as an investment in a long game. It takes a great deal of time upfront, but you will continue to do business with them for many years.
These buyers can appear to be an inquisitive buyer at first, but you will come to learn that no deal is ever good enough for these perfection seekers. You will find that they begin to ask questions that make no sense in an effort to wear you down and force you to make a deal that is not profitable. This type of buyer is genuinely a seller beware person. And you should know to expect the unexpected and be careful not to invest too much time, effort, or sanity in trying to please this buyer.
Tire-kickers are not known for closing deals. And at your first opportunity when you have determined that you are talking to a tire-kicker, mention your nonrefundable earnest money requirement. That will often save you a massive amount of time.
The Savvy Buyer
This is the buyer that every real estate wholesaler wants to find for every deal. This person knows the business and is willing to close the deal after looking at the numbers and seeing pictures of the property. The issue with these buyers is that they understand the deals and know exactly where the money is going. And that includes how much you want to make in profit. So don’t let them talk you down. These buyers can appear to be very intimidating if you are a new real estate wholesaler, but stand your ground and make your money on the deal.
The most significant benefit of having savvy buyers on your buyer’s list is that you can funnel your best deal to them and know that they will snatch them up. However, if your inventory is low, it could be a challenge to have enough deals to keep a savvy buyer happy. But that is an excellent problem to have.
The Pretend Buyer
These can be the worst buyer of all. In some cases, they are honest and tell you that they need to find an end buyer, but most will hide that detail and tie up your property for a long while. The key to making a wholesaler a successful buyer is a hefty earnest money deposit.
It takes time and experience to spot each type of buyer quickly and know how to adjust your sales approach. But with any buyer, you need to be confident in your numbers and your knowledge of the market. Every buyer is trying to get the best deal possible. They are just trying to get to that number using different tactics. Stand your ground, be professional, and know that some buyers are not really buyers at all. Your time is valuable, and you should not allow those fake buyers to waste your time or money.