Comparing Real Estate Agents to Wholesalers
Real estate agents and wholesalers both negotiate contracts for the transfer of property. Both work as a middle man between buyers and sellers and earn a commission or fee for their services. However, while real estate agents are licensed to work with agencies and oversee every aspect of a sale, a wholesaler is usually unlicensed and self-employed.
|Job Title||Education Requirements||Median pay (2018)*||Projected growth (2018-28)*|
|Real Estate Agent||High school diploma or equivalent
Real estate license
|Wholesaler||High school diploma or equivalent||$50,300 (real estate brokers and sales agents)||7% (real estate brokers and sales agents)|
Source: *U.S. Bureau of Labor Statistics
Responsibilities of a Real Estate Agent vs. Wholesaler
Real estate agents and wholesalers keep track of listed properties, connect investors to available properties, and negotiate contracts. Licensed real estate agents may also work with buyers. They have the advantage of access to the MLS database. Wholesalers must develop their own methods to discover the best real estate deals. While real estate agents have the legal authority to oversee the entire process of selling a property from start to finish, a wholesaler steps out of the contract halfway through and sells their terms to an investor who completes the sale.
Real Estate Agent
Real estate agents are experts in sales, marketing, and the legal process of transferring property. They can work for buyers, finding the perfect listings and representing the buyer's interest in the process of purchasing a home or commercial property. They can also work for sellers, preparing houses for listing, organizing marketing efforts, and representing sellers in the legal process of selling a home. Or they can work for agencies that sell and rent properties. Real estate agents work for a commission, so their salary varies widely depending on how many houses they sell in a year. They tend to travel around a lot to show houses and meet clients, so no day on the job looks the same.
Job responsibilities of a real estate agent include:
- Advising sellers on staging, marketing, and listing houses
- Advising buyers on potential listings based on their budget, needs, and preferences
- Showing houses to potential buyers
- Running open houses, designing fliers and organizing other marketing efforts to generate leads
- Negotiating relations between sellers, buyers and intermediaries
- Writing contracts and providing other legal documentation during the sales process
A wholesaler is a person who finds discounted properties (foreclosures, distressed and undervalued properties), negotiates a contract with a seller, and then sells their contract terms to an investor for a fee. Wholesalers connect investors to sellers by finding great investment opportunities and selling their spot in the contract. Although each state has different laws regarding wholesaling practice, in most cases wholesaling allows individuals to bypass the requirement to have a real estate license. A wholesaler's yearly income is dependent on how many contracts they sell, so it varies widely.
Job responsibilities of a wholesaler include:
- Locating undervalued properties by monitoring listings and developing a network
- Evaluating the price of property, taking into account necessary renovation costs
- Marketing listings to potential investors
- Building a network of interested investors
- Negotiating a contract directly with a seller
If you want to become a wholesaler, make sure to also look into jobs as a property manager, another position that involves advertising properties without a real estate license. If you prefer to become a licensed real estate agent, consider a career in commercial real estate where you can apply your legal expertise and sales skills selling commercial property.