It doesn’t matter what type of financial transaction you’re talking about – a deal “isn’t over until it’s over,” as the saying goes. This is especially true in wholesale real estate, where things are more malleable than most. Here, you’re talking about two transactions: one between a buyer and one with a seller. Things have to go just right for everything to work out favorably for all involved, and, unfortunately, that won’t always be the case.
Thankfully, all hope is not lost. If you suspect that a wholesale real estate deal is about to fall through (or if you’re in the middle of that situation now), here are a few practical steps you can take next.
Stay Calm and Be Professional
Yes, it can be a major disappointment (to say the least) to realize the deal you’ve put a lot of time and effort into is in the process of falling apart. But when it becomes clear that things aren’t working out how you’d hoped, the last thing you want to do is let emotion influence how you respond.
Even if you objectively feel like the deal falling through was the fault of a buyer or seller who made a mistake, stay as calm as possible. Going around and pointing fingers won’t change the outcome – it will just burn some bridges you may need to rely on later in your investment career.
Remember that a successful wholesale real estate journey will be built on the strength of relationships. You can’t begin to forge those relationships if you immediately get angry every time a deal falls through. There will be situations when things don’t have a happy ending, even while everyone operates with the best intentions. The key is to experience this, understand what it feels like, and move on maturely and professionally.
Conduct a Post-Mortem Analysis
Next, you’ll want to conduct a “post-mortem analysis” of the failed deal. You know what happened – things fell apart. Now, it’s time to drill down and figure out why.
Was the deal falling through the result of some type of mistake that you made along the way? See if you can figure out what it is and what influenced you to make that particular choice so that you can avoid it again. Was it an issue with the seller? Go back to your relationship with this person and see if there were any “red flags” or warning signs that you may have missed along the way. Do the same with the buyer.
Was it simply a matter of the market changing beyond your control, killing the deal before it could be finalized? Given how quickly things move, this is within the realm of possibility.
Getting the answers to questions like these is helpful because they should inform how you act professionally moving forward. Even seasoned wholesale real estate professionals will tell you that continuous improvement is one of the keys to their success. The minute that you think you’ve “done enough” or that you’re as good and as skilled as you can be is the moment you stop developing. Therefore, you need to be able to learn from your victories and even more from your failures. Conducting a careful post-mortem analysis is just one of the ways in which you can do that.
Maintain Open Communication With Everyone Involved
Finally, once the wholesale real estate deal has fallen through, you must resist the urge to entirely cut someone out of your professional life. Even if you’ve managed to navigate the situation with complete composure and conducted a post-mortem analysis to figure out precisely what went wrong, you still need to maintain open communication with all parties.
Tell people why things ended the way they did, and share some of the insight you’ve learned. If the deal fell through because someone made a mistake, tell them about it in good faith so that you can help them improve, too. At the end of the day, you are all in this together – a wholesale real estate transaction should end with all parties walking away satisfied. Nobody will be happy when a deal falls through, but that’s okay, provided that you’re all on the same page about why it happened and are ready to work together in the most professional manner possible in the future. Again, this is all about relationships, and the sooner you drill that into your head, the sooner you’ll be able to use it to further your career.
Overall, even if you go into a wholesale real estate deal feeling completely confident about what will happen, you should still have contingency plans. This is one of those situations where Murphy’s Law can and often does apply. Have backup exit strategies in place at the outset, if nothing else, to make your participation in the collapsed transaction as easy as possible to resolve.
Above All, Learn From Your Experience
By approaching any wholesale real estate transaction with equal parts resilience and adaptability, you can put yourself in a position to turn setbacks into opportunities before you know it. Remember that every deal is a learning experience – even the negative ones. Use this as a chance to refine your business practices and develop the skills needed to navigate the challenges of wholesale real estate with more confidence than ever. If nothing else, you can avoid similar pitfalls moving forward.
Read Also: What are the different types of Real Estate Investors?
