RISKS OF SELLING YOUR LAND TO A "FLIPPER" OR "WHOLESALER"
RISKS OF SELLING YOUR LAND TO A "FLIPPER" OR "WHOLESALER"
(UPDATED MAY 14, 2024)
BE AWARE OF "LAND FLIPPERS" OR "WHOLESALERS"!!
"WHOLESALING" LAND IN NORTH CAROLINA, SOUTH CAROLINA AND MANY OTHER STATES IS 100% ILLEGAL!
"WHOLESALING" IS THE PRACTICE OF A "BUYER" PLACING A PROPERTY UNDER CONTRACT TO BUY, THEN TURNING AROUND AND SELLING THE CONTRACT FOR A PROFIT.
99.9% OF ALL OF THE LETTERS, CALLS, TEXTS, OFFERS, ETC THAT YOU ARE RECEIVING ON A DAILY BASIS, FOR A FRACTION OF WHAT YOUR PROPERTY IS WORTH, ARE BEING SENT BY "WHOLESALERS". THESE ARE BUYERS OPERATING ILLEGALLY!!
Folks we are in the Wild West of land buying. Just like we were in the 2000’s up to 2008 with house “flipping”, as glamorized by all the the television shows, we are now in an era of land “flipping” and even worse, “wholesaling”.
Let me boil it down real quick and easy. There are a TON of online programs, tutorials, software packages, websites, training courses, etc. churning out literally thousands of new “experts” in the business of buying (actually not buying, just taking advantage of you) land to resale at a profit. There are a TON of social media pages and groups dedicated to folks buying and selling land they do not even own (aka “wholesaling”). In some states this is actually illegal. ( The NC Bar Association has recently started discussing ways to restrict this practice) The waters are swarming with sharks trying to buy your land for NOTHING. UPDATE: SOUTH CAROLINA IS THE MOST RECENT STATE TO OUTLAW “WHOLESALING” OTHERWISE KNOWN AS SELLING THE CONTRACT ON A PROPERTY NOT OWNED YET. Wholesaling is the practice 99% of all of the so called land “buyers” use now because most of them do not have the money to actually buy your land so they just want to sell the contract. NOW ILLEGAL IN MANY STATES AND MORE ON THE WAY.
The ugly TRUTH about land flippers and wholesalers.
AVOID selling your real estate to land flippers and wholesalers. Why?
ALL of these buyers strive to buy your land for next to nothing so they can profit. They are literally trying to steal the value from owners who either do not know what their land is worth or even worse, who may be under duress to sell.
Most of these buyers are really trying to get your land under contract so they can “wholesale” the contract to another buyer. This means they will never actually take ownership of your land but will add thousands in profit that the “new” buyer will pay when they buy the contract from the “wholesaler”. Many states consider this “Equity Theft” and are making it illegal to operate in this manner.
With literally thousands of internet resources, these buyers can buy land literally anywhere in the world without ever having to leave their sofa or even worse, their parent’s basement.
With a due diligence period built into the contract, these so called “buyers” have you tied up and obligated but they are not, so if they can’t find a buyer for the contract, they will just terminate the contract leaving you with nothing but wasted time and energy. This happens in the MAJORITY of these wholesale deals. We have been studying this illegal activity for several years and have spoken with the NC Real Estate Commission about it and they have taken a strong stance this practice. It is illegal in NC, SC and many other states. Read here for more info about the illegal practice of wholesaling in NC.
These buyers are unscrupulous, greedy and are bottom feeders or what the old timers called “pinhookers”. They are not good for you as a seller, the industry, or the communities where they try to buy land. The bottom line is they do not care about you, they do not care about the land or the community, and they are in business simply to take advantage of you and to profit wildly at your expense.
What to watch out for
- Is the “buyer” out of state with no apparent connection to your land or the local area?
- Does their website look legitimate and local or does it look very generic and out of state? Most use website templates that all look the same because they are all sold by the same few internet companies. “Carrot” and “Lead Propeller” are just two of the companies that market websites to these land crooks.
- Is there a third party “assignment” clause in the contract? THIS IS A BIG GIVE AWAY. BEWARE!! This allows them the legal ability to sell the contract to a third party. WITHOUT THIS LANGUAGE THEY CANNOT DO THIS.
- Does the buyer just not seem like they should be buying land in your area? Let your gut tell you if they are legitimate or not. Most of these “wholesalers” can be found on social media and you will find that they rarely look professional.
- Does their website have “BBB ACCREDITED BUSINESS” logo or a “GOOGLE 5 STAR RATING” logo? Be AWARE!! These are commonly used tactics to build false trust on a website. These logos are easily copied on the internet and applied to a website. Even worse, the Better Business Bureau is simply a PAID ranking organization. Any business can join the Better Business Bureau which is simply a trade group whether they have good rankings or not. Do NOT put any trust into these or other similar claims on land “Wholesaler” websites.
- Is the “buyer” avoiding putting earnest money down on the purchase?
- Generally if you receive any unsolicited offer for your land, it is a wholesaler ( and more than likely an insulting offer).
The Take Away
So what do you do if you want to sell at the best price and avoid being taken advantage of by one of these “wholesalers”?
Sell to a company who 1) Actually has cash and will actually close and take possession of the land, 2) is local to your state, 3) does not have a third party “assignment clause” in the contract. 4) Is local and has a vested interest in the community.
PLEASE CONTACT US IF YOU ARE SELLING LAND IN NORTH CAROLINA.
WE HAVE OUR OWN CASH
WE CLOSE ON EVERY TRACT IN OUR OWN NAME, WE NEVER FLIP CONTRACTS. NEVER.
WE BUY TO OWN LONG TERM
WE ARE NOT “WHOLESALERS” or “FLIPPERS”
WE HAVE BEEN BUYING AND OWNING LAND IN NORTH CAROLINA FOR OVER THIRTY YEARS AND HAVE MANY SATISFIED SELLERS TO PROVE IT.
The bad thing about land “wholesalers” is that they take advantage of so many people and really leave a bad taste in the mouths of sellers. The good thing is that when the economy slows down again, many of these bottom feeders will be forced out of business just like they were in 2008.
If you are interested in selling your North Carolina land, please contact us for a FREE, NO OBLIGATION, NO COST, NO RISK review and offer. It’s easy!
NCLANDBUYERS greatly appreciates the opportunity to discuss your land with you. If you are interested in selling your land and would like a serious, fast offer, please fill out the form below. If you have any other land needs we are more than happy to help. Even if we do not buy your land, we are always happy to help in any way we can. Just reach out to let us know how we can help or if you just want to chat about North Carolina land!