Let’s talk about real estate wholesaling. You know, that “investor strategy” where someone convinces a seller to accept way less than their home is worth—only to flip the contract to another buyer for a quick payday. If you’re already rolling your eyes, good. Because we need to have a real conversation about why this practice isn’t just bad for customers—it’s bad for the industry as a whole.
What Even Is Wholesaling?
If you’re unfamiliar, wholesaling in real estate is when someone gets a home under contract (usually at a deep discount), never actually buys it, and instead assigns the contract to someone else for a profit. Picture this:
- A seller thinks their home is worth $300,000.
- A wholesaler convinces them to sell it for $200,000—sometimes using tactics that range from aggressive to borderline deceptive.
- The wholesaler never intends to actually close. Instead, they find another buyer (usually an investor), sell them the contract for $220,000, and pocket the $20,000 difference—without ever owning the home.
Meanwhile, the original seller just lost out on potentially $100,000, and the investor buyer is thrilled because they just got a property for under-market value. Everyone wins, right?
Well, everyone except the person who actually owned the home.
Why It Feels Shady (Because It Is)
At its core, wholesaling thrives on a lack of transparency. It preys on homeowners—often those in financial distress—by convincing them they’re getting a fair deal when they’re not. Here’s why it’s problematic:
1. The “Investor” is Not Acting in the Seller’s Best Interest
Unlike real estate professionals who have a legal and ethical duty to act in the customer’s best interest, wholesalers have one goal: get the property for as little as possible so they can make a quick profit. They don’t disclose that they’re not actually buying the home. They don’t explain that a better offer might be possible. They just say, “I’ll take this off your hands. Cash offer! No hassle!”
The only “no hassle” part is for them. The seller is just getting shortchanged.
2. It Goes Against the REALTOR® Code of Ethics
REALTORS® are bound by a strict code of ethics. We don’t manipulate, deceive, or take advantage of sellers. We educate them, advocate for them, and negotiate the best possible deal for them. Wholesalers? They’re the unlicensed Wild West cowboys of real estate, operating in a gray area where “technically legal” does not mean morally right.
But you know what’s even worse? REALTORS® wholesaling.
3. Yes, Some REALTORS® Are Wholesaling—And That’s a Huge Problem
This is where things go from shady to downright unacceptable.
There’s a growing number of licensed professionals who should be acting in the best interests of their customers—but instead, they’re dabbling in wholesaling. Let’s be clear: if you have a real estate license, you should not be locking up properties at artificially low prices just to flip contracts behind the scenes. You should be listing those homes on the open market and getting the seller top dollar.
A REALTOR® wholesaling is like a doctor selling you a treatment they know isn’t the best option for you—just because it makes them more money. It’s a total conflict of interest, and it completely undermines the trust that consumers place in our profession.
We’re supposed to be the trusted advisors in real estate, not the ones secretly making side deals that leave homeowners with less money.
4. If It’s Such a Great Deal, Why Not Just List It?
Here’s the thing: if a property is truly worth $300,000, and someone’s willing to pay close to that, why wouldn’t the seller just list it? I’ll tell you why—because the wholesaler knows they can get more but would rather pocket the difference than let the homeowner benefit.
A REALTOR® would simply list the home on the open market, attract multiple offers, and potentially get an even higher price. Oh, and the seller wouldn’t have to wonder if they got played.
5. It’s Just Plain… Gross
You ever get that feeling when you hear about a shady business practice, and your gut just says, “Nope, that ain’t right”? That’s wholesaling in a nutshell. It gives off the same vibes as timeshare sales pitches, overpriced warranties at the car dealership, and those “Congratulations! You’ve won a free vacation!” calls that mysteriously require your credit card info.
And when a licensed REALTOR® does it? That’s like finding out your accountant is also running a side hustle as a payday lender.
So What’s the Alternative?
Glad you asked. If a seller is in distress and wants to sell quickly, they still have better options:
- List it with a real estate agent. Even in an as-is condition, properties sell—often with multiple offers. And even after paying a commission, sellers still walk away with more money.
- Sell to an investor the right way. If speed is the priority, they can work with a reputable investor—one who is upfront about their intent and actually buys the home.
- Explore financing or assistance programs. Sometimes, sellers don’t need to sell at a loss. There are grants, loans, and other programs to help homeowners avoid foreclosure or financial hardship.
Final Thoughts: REALTORS®, Do Better
Real estate is about helping people. It’s about guiding them through some of the biggest financial decisions of their lives with honesty, integrity, and transparency. Wholesaling, on the other hand, is about taking advantage of people who don’t know any better.
To all the honest, hardworking real estate professionals out there: keep doing the right thing. Educate your customers. Advocate for them. And if you see a REALTOR® wholesaling, call it out. Because we don’t need this nonsense in our industry.
And to the REALTORS® who are wholesaling:
- Stop.
- Seriously, stop.
- If you love wholesaling so much, give up your license and go do it full-time. But as long as you wear the REALTOR® badge, do your job: help people get the most money possible for their home.
Want to sell your home fast and for top dollar? CENTURY 21 Edge has you covered. Call a REALTOR® who actually respects their profession.
