Wholesale guide
How do you know if a wholesale deal is priced too high?
A wholesale deal may be priced too high when its contract price plus the proposed assignment fee exceeds what supportable resale value, realistic repairs, and likely buyer economics can justify. Buyer Pay Ceiling offers one bounded percentage-of-ARV screen, but the conclusion depends on verified inputs and feedback from buyers who know the property and market.
Start with the evidence behind the number
First test ARV rather than trying to make a weak deal work by adjusting the buyer percentage. Use recent, relevant closed sales and account for location, property type, size, condition, and meaningful differences. An optimistic ARV can inflate every downstream calculation. Then inspect the property or obtain credible repair input; a low rehab placeholder can conceal the largest risk in the deal.
Write down what is known, what is estimated, and what remains unknown. If access is limited or major systems have not been evaluated, treat the repair figure as provisional and test a more conservative scenario.
- Compare like-for-like sales and explain adjustments.
- Separate confirmed repairs from allowances and uninspected items.
- Check title, occupancy, access, and the contract terms that affect transfer.
Run the fee-aware Buyer Pay Ceiling screen
BPC estimates a bounded percentage of ARV using qualifying ZIP-level flip observations or market signals when available, otherwise a default market rate. The wholesale screen is (selected ARV × BPC percentage) − estimated rehab − proposed wholesale fee. Compare the result with the seller price or contract price, using the same assumptions throughout. A negative or thin gap is a warning to investigate; it is not proof that no buyer will pay.
Test alternate ARVs and rehab scopes rather than selecting only the combination that produces the desired answer. Note whether the reported percentage uses ZIP Flip Data, Market Signals, or the default. The source and limits matter when judging confidence.
- Model conservative and reasonable repair scenarios.
- Show the assignment fee explicitly so the buyer's total basis is visible.
- Compare the screen with buyer-specific feedback, not a universal rule.
Use buyer response as evidence, not a verdict
Repeated, specific objections—such as a price gap tied to repair scope, resale comps, or access—can indicate that the package or pricing needs work. One rejection may instead reflect a buyer's strategy, liquidity, geography, or timing. Ask what assumptions drive the buyer's range and whether different terms would change it. Update the analysis only when new evidence supports the change.
BPC is not a buyer quote, sale prediction, or full buyer cost and return model. It does not include every buyer's financing, holding, closing, selling, or required-return costs. Verify independently and avoid describing a screening estimate as confirmed market value.