In real estate, a Multiple Listing System (MLS) is where about 75 percent of homeowners list their house when they are trying to sell. Homeowners usually call a realtor first, and the portal that the real estate agent uses to show buyers the property is the MLS. This system is a profitable source for real estate wholesalers. Understanding how to move a home listed on the MLS over to the buyer will lend a steady income.
This wholesaling process can be completed in four easy steps. First, find a realtor that is willing to work with you, the real estate wholesaler. Next, build a buyers list of investors. Then, ask for properties from your chosen realtor that meet a certain criteria. For example, you need to be able to see the homes in just your area. Lastly, you will need to sign the necessary documents, known as the Instant Equity Exchange (IEE).
Find a realtor
Realtors are the key to unlocking the Multiple Listing System (MLS). Without a real estate agent, wholesalers cannot get access to the MLS or make any offers on properties listed. Find a realtor that has an open mind and is willing to work with you. To be a real estate wholesaler, you will be working closely with the realtor you choose. The realtor will be making commission from the homes you buy, if he or she works with you. Many real estate wholesalers like to make offers on property listings that have been in the system for at least 90 days. Any listings around this time are expiring soon, so the wholesaler is helping the realtor by introducing the home to their buyers list of investors.
Build a buyers list of investors
While realtors spend most of their time selling properties, real estate wholesalers spend most of their time building a buyers list of investors. This buyers list is the base that wholesaling is built on. Every good real estate wholesaler spends about 90 percent of their time building a buyers list.
Ask for properties that meet a certain criteria
Have the realtor you choose to work with send you homes that are in your area. You should ask for properties that have descriptions. For example, the home might have a description like “Make Offer” or “Motivated Seller”. Homes that have been listed in the Multiple Listing System (MLS) for at least 90 days are also a good choice for real estate wholesalers.
Sign necessary documents
When you get an offer that is accepted in the Multiple Listing System (MLS), you will need three documents. These documents are known as the IEE or Instant Equity Exchange. The IEE must be signed by the seller and you, the real estate wholesaler.
The investor disclosure agreement (seller’s acknowledgment) is a contract that explains to the seller that the real estate wholesaler is actually an investor. This document also states that wholesaler has intentions of selling the equity to another buyer for profit. The investor purchase agreement is a standard purchase agreement between the buyer and seller.
The discharge of agreement to purchase is the last contract that you will need. Once you have found a homebuyer, you will need to get this document signed. When this new contract is signed, you can shred the original purchase agreement.
These documents act as your invoice. You will hand these contracts to the title company or closing realtor to receive your agreed amount at the time of closing.
Looking for a realtor in your area? For more information on buying and selling homes, contact the Elite Real Estate Group in Amarillo. Give us a call today at (806) 337-0883 or Contact Us via email. You can also view our listings to see the homes we currently have available in the Texas Panhandle area.