Wholesale vs. Retail

There are several different types of buyers in the pool today for the North part of Atlanta. There are true investors, and there are people that are trying to take advantage of the market conditions...and trying to act like investors.

There are two different types of sellers as well. We will call them Wholesale or Retail.

The problem is that many of them are colliding, and only causing frustration for each other vs. the ultimate goal of creating a sale.

The true investor will stick to the fundamentals that allowed them to earn the title of "true investor". They will typically only look at opportunities that would fall under the Wholesale Seller. In this type of arena, the true investor knows there will be inherent risk, and usually the homes will be in less than acceptable condition. They will need improvements, and also need to be brought up to today's standards of specifications. They will also be priced for the "deal" to be made.

The buyer trying to think like an investor, but intending on buying a home for their family at an investor's price, is the one that is causing frustration. The reason they tend to be causing frustration is that their expectations are typically off-base.

This person has heard about all of the foreclosures, and the deals that are out there. They begin the search, at first, out of curiosity...then with a sense of passion. A passion for "giving someone a blood-bath".

Now, there is no harm with someone wanting to get a deal, but the homes they are falling in like with do not measure up to the ability of getting "the deal". They tend to be attracted to the Retail Sellers home that has been updated some, and is in great condition.

These Retail Sellers have taken better care of their home (because they knew they were not behind in payments, and needed to get what they could out of the home), and in many cases, have updated the interiors unlike most of the Wholesale situation homes.

So this presents a big gap...and tends to lead to angst, and a lot of emotions...on both sides!

The Retail Sellers expect to get close to what they are asking for their home. After all, they would not have kept it in the condition and added things if they would accept Wholesale Pricing.

The buyer trying to think like an investor gets frustrated because he/she has heard of all the deals that are 40% below market value.

The best question to ask a buyer: "Mr./Mrs. Buyer, are you interested in buying a Retail Home, or a Wholesale Home?"

They will probably ask what you mean, and then you can use the examples listed above to educate the buyers as to the reality of buying today:
The best POTENTIAL deals usually require the highest level of risk, and work to get them to where you would want to live in them. They are typically owned by a Bank, Company, or Institution that wants to dump them off their books.
The Retail Homes are usually in move-in condition, and have much of today's decor and features...they are still extremely attractive VALUES, but may not have you feeling like you gave someone a "blood-bath".

It may help you educate them and have a much more fulfilling process...for everyone involved!