LOUISVILLE, Ky. (WDRB) -- Wholesalers getting contracts on homes across Kentuckiana and in most cases, the wholesaler doesn't put any money on the line.
While it's not a scam, some homeowners are learning it's an offer that's missing important information and thousands of dollars.
Chris West is a broker associate with Re/Max First in Jeffersonville. She is concerned after finding a wholesaler at a recent listing appointment.
"He called me later and told me that they did in fact, sign a contract," West said.
The home is on Maple Street in Jeffersonville and owned by an elderly woman who wants to downsize.
"It is very sad," West said.
West said after talkin to the wholesaler, she asked the homeowner to confirm the deal.
"She told me that they did in fact sign a contract, and I said, 'if you don't mind me asking, how much are they going to give you for your house?'" West said. "She said '$35,000 and I was floored.'"
Within a few days, the wholesale company had already listed the home for $89,000. West believes it is worth at least $139,000.
"$54,000 is if they get full asking prices, what they're potentially going to be walking away with for doing nothing for this house," West said.
According to the Indiana Real Estate Commission, the wholesaler hasn't broken any laws.
"Basically what they do is they find a seller," West said. "They offer them X number of dollars for their house, knowing full well that it's worth more and then they go out and they find a buyer."
Bill Burns, a broker for Re/Max First said there is a difference between a wholesaler and a flipper.
"They'll make 30, 40, 50 thousand dollars and never do anything," Burns said. "A true flipper buying the property and putting the equity into the home or remodeling the home to bring it up to today's standards and selling it. A wholesaler is never going to do anything. They're likely never even going to buy the home. They're just going to be a buyer on paper and click to check the closing."
Although the wholesalers haven't broken any laws, West said they're trying to help the Jeffersonville homeowner.
"There's me and a couple of other realtors that have kind of jumped on this bandwagon to try to see if we can get something done," West said.
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