Does a dispo fee change if the contract seller already has a partial buyer list?

Question

Trying to get my head around how this is priced in practice. I'm on the capital side so I'm used to thinking about risk-adjusted returns, and the fee structure here seems like it should reflect how much work the dispo person is actually doing. If a wholesaler brings me a contract and says they already have three warm buyers who've looked at it but passed, versus handing me a cold contract with no prior exposure, those feel like very different jobs. First scenario maybe I'm making two or three calls to my own people. Second scenario I'm running a full campaign, working the list for days, maybe taking a 48-hour window with multiple buyers in play. On a deal where the spread is $30k, a flat 50/50 split pays out $15k either way, but the actual work and risk of non-assignment isn't close to the same. I've seen some people mention tiered arrangements where the fee goes up if the contract sits past a certain point, which makes more intuitive sense to me. Has anyone actually structured it that way in writing, and did the wholesaler push back hard on it?

stefan_novak · Answer

Wholesaler pushed back hard on the tiered structure until the contract sat 11 days and they needed me more than I needed them.

samantha_ruiz · Answer

Ran something like this on a Phoenix deal last spring, $28k spread, seller had already shopped it to four buyers who all passed. We ended up at a flat $6k for dispo because the pre-exposure killed the urgency angle and I knew my list was going to be working uphill against a story. The tiered thing I have done once where we wrote in a base fee that stepped up $2k for every week past day 10, and the wholesaler was fine with it because he was confident it would move fast, which tells you something right there about how a wholesaler reads their own deal. What I would want to know before agreeing to anything here is why those three warm buyers actually passed, because "they looked at it" and "they passed after underwriting it" are completely different problems and one of them means the number is wrong, not the list.

Does a dispo fee change if the contract seller already has a partial buyer list?

2 replies