Got an email about a house from someone calling themselves a dispo manager, first rental

My first rental closes in about five weeks, a small three bedroom I found through an agent. Somewhere along the way I ended up on an email list, and now I get two or three messages a day about houses with subject lines like off market cash only and a price and an ARV number.

Today's came from someone whose signature says dispo manager. The property is 118k, the email says ARV 175k and rehab 30k, and there's a line at the bottom saying assignment fee included in price, buyer pays all closing costs, non refundable earnest money of 5,000 due within 24 hours of contract.

I don't understand what I'm looking at. Is a dispo manager an agent? Nobody in this email seems to own the house. And non refundable earnest money in 24 hours sounds like the kind of thing that should worry me, though I don't know if it's normal in this corner of the business.

I'm not planning to buy it. My money is committed to the closing. But these emails will keep coming and I'd like to know how to read one, and specifically whether the ARV and rehab numbers in them mean anything or are just marketing.

1 reply

0angela_burkeServicePRO6

Dispo is short for disposition, meaning the selling side. A dispo manager works for a wholesaler and their job is to find a buyer for a contract the wholesaler has already signed with a homeowner. So you're right that nobody in that email owns the house. What's being sold to you is the right to step into that purchase contract, and the assignment fee is what the wholesaler keeps for the handoff. Whether they need a license to do that, and what they have to disclose to you and to the seller, depends on your state, and several states have tightened those rules recently, so ask a local attorney before you ever sign one.

The ARV and rehab numbers are marketing. Treat them as the seller's opinion. I run a small team on the service side and I've seen the same house blasted by three different people with three different ARVs in a week. You verify by pulling your own comps and getting your own contractor through the property.

Non refundable earnest money in 24 hours is common in this channel and it's exactly what it sounds like. You're being asked to commit money before you've inspected or seen title work. Some buyers accept that because they've done fifty of these and know the sender. For a first purchase, that risk is not yours to take.

Got an email about a house from someone calling themselves a dispo manager, first rental

1 reply