Exclusive Listings vs. Open Market: Is Wholesaling Being Helped or Hurt?

I have experienced an increase in agents, from more niche brokerages contacting me. I operate mostly off-market, however since I need to be licensed in IL in some situations utilizing the MLS' reach makes more sense, like when the seller's primary motivation is price, and they don't care how long it takes to sell. Rather than lose the opportunity to an agent I list it. The last one I sold this way was in rough condition, seemingly a wholesale all day long. Most traditional agents wouldn't want to deal with it, or even know how to market it. After it was sold I was contacted by at least a dozen agents asking if I would let them know about other opportunities I get like that one before I list it. They assumed, without doing any research on me that I was a traditional agent so they tried to entice me with a flat fee that would be more than a standard listing fee. 

Since their arrogance was so blatantly on display it was a great opportunity to interview them without them even realizing it. What I learned is not exactly earth shattering, they have access to all the same tools, distressed lead lists, and pay per lead services that we use to reach out to distressed sellers and now they are starting to use them. They have compiled their own buyer's list using the MLS data they have available to them. They don't intend to list it, they are providing the opportunity off-market exactly the same way we would as wholesalers, except they can use their brokerage name to lend whatever credibility it may. They also push to control the title process so of course they are in control.

What I found underwhelming was their lack of knowledge regarding the investment process and especially estimating rehab costs, which of course drives the price. Some had done flips so got it, but the majority had not. So I don't think they are any different than an inexperienced wholesaler. Fundamentally, whether they are a realtor or not doesn't matter, whoever gets the house under contract first gets to take a swing. In my little sample I saw a lack experience with distressed properties and have no concern that I couldn't better educate the seller on why we are a better solution. As we know, most distressed seller's primary concern is that the house will close. Some of these agents will likely carve a niche once they can establish the trust of their buyers. Although many just seemed to be doing as told and make phone calls. I actually heard the exact same script from 3 different agents from one local brokerage, none of these 3 agents had a clue how to handle a distressed property.

In my humble opinion I don't find them much of a threat, the bigger issue seems to be more and more regulations requiring licenses can open the door for unqualified and inexperienced agents to solve what are often complex distressed situations.

Really interesting breakdown ​@Peter Osmanski, sounds like you’ve seen firsthand how some agents are trying to play in the off-market space without really understanding how to navigate distressed deals. Got me thinking… in states where licensing is required, do you think this actually creates more risk for sellers? Like yeah, the agent’s licensed, but that doesn’t mean they know how to structure a deal that closes.

Curious if you’ve seen any situations where a deal fell apart that probably would’ve gone smoothly with the right buyer pool - especially if it had been pushed through something like Investorlift where vetted buyers are ready to move.

Yes, I absolutely believe the risk to the seller can be increased with a misguided sales approach for distressed homes. Having been through the licensing process I can say from actual experience that those courses teach absolutely nothing about how to actually execute the business, so nothing on determining comps, ARV, repair costs, how to market to the right buyer, etc. That is all learned in the real world.

So I agree fully that just because somebody is licensed doesn’t at all mean they are qualified to best help a distressed seller. I have played clean up in a number of instances where a traditional realtor just listed it and let it sit thinking the MLS will miraculously just find a buyer, and shocker, it didn’t. Unfortunately in some instances those homes wound up being lost to foreclosure, that is a terrible outcome that could have been avoided with the right guidance.

A tool like investor lift brings real buyers with real experience to the situation who provide fact-based analysis on where the price needs to be. And sometimes they can introduce some creative solutions that may not have even been recognized to best solve the seller’s situation.  

​@Dispomoneymike ​@Patrick yancy ​@Ruben Jimenez ​@Cory Boatright ​@Zoerene ​@John Mars ​@Ike I’d love to hear YOUR take! Drop a comment below and share your experiences - have you seen exclusivity help or hurt your deals?

Corporate companies are starting to notice market share opportunity in Direct Response Marketing Channels like direct mail, pay-per-click, and telemarketing. The opportunity to deal directly with the owner cuts out a lot of expense and that is being exploited more by corporate companies and hedge funds. However, these companies have much more “red tape” to deal with than mom and pap Wholesale small businesses. There will always be opportunities for Wholesalers and real estate investors that market to owners. They will be able to move faster and be more personable than corporate hands. Off market marketplaces such as Investorlift, Zillow FSBO, FSBO sites, etc. They will won’t go away anytime soon. The A.I. changes are happening fast to compute data and create more efficiencies and financial models, but A.I. lacks experience dealing with motivated sellers that don’t want to deal with Agents or corporate. 

Things are getting more advanced daily, but right now, real estate investors that focus on direct response marketing still have an edge and 5% market share.

​@Cory Boatright Appreciate the thoughtful breakdown! 
Quick question to dig deeper: In your experience, which direct response channel is currently delivering the best ROI - and how are you adapting your messaging to stand out as corporate players ramp up spend in those same lanes?

Pay-per-lead with Ai summary provides best ROI right now. No messages necessary as this is INBOUND Marketing. Outbound channels is letter to probate leads from specific counties. Letters convert better than postcards. Use AI to get messaging that doesn’t sound corporate, but has empathy and speaks to the pain with a fast solution.

​@Cory Boatright Really appreciate you sharing the specifics. Love the emphasis on empathetic messaging too, that’s where small operators can really shine. 🙌 Thanks again for contributing real tactical value here!

My apologies for being late to the Party😊 As a wholesaler, I’m less concerned about regulations or the noise around agents vs. investors, my focus is on how we pivot to continue serving distressed homeowners, which is at the heart of what we do.

Yes, I’m studying now for my Florida State exam to get licensed, but that’s not about losing my edge as a wholesaler, it’s about adding another tool in the toolbox. Licensing gives me one more way to position myself as a trusted solutions provider for sellers, while still delivering a great product to end buyers.

Exclusivity is rising, and in many ways, brokerages are copying what wholesalers have always done. The difference is, we don’t just ‘control’ inventory; we solve real problems for homeowners who may not have any other path forward. Our job has never just been about hiding deals from the MLS. It’s about creating transparency where it matters: the condition of the property, the seller’s reality, and the numbers that make sense for the buyer.

I see the future as less about Wholesaler vs. Agent and more about a hybrid model where we’re all coming together to focus on the real customer: the homeowner. If we keep building systems that educate, support, and empower distressed sellers while packaging opportunities responsibly for buyers, then we all win, no matter what label or license we carry.

In this fast-evolving market, information IS power. But service and trust will always be the greatest leverage we have.”

Spot on, I don't see why it needs to be a wholesaler vs agent. As long as we are living in homes, there will be distressed homes. Plenty of them for whatever your preferred approach. There will be some who choose a path, stick to it, and crush it. It is more out of necessity in my market having a few more tools in the tool belt helps eliminate the need for the seller to explore other options. That just isn't necessary in every market.  
 

​@Zoerene no apologies needed - you always bring the heat when you show up! Appreciate you sharing your journey so transparently!