short sale scam

Foreclosures, Short Sales, Tax Foreclosures
1

Here is the situation Realtor agrees to market a house for $$$ and wanted to sell the home to investor group and convinces the bank to accept that price.The Realtor then list the home on his company website and negotiates a $$$$ deal with me.I submited my contract and did not get the ratified contract as I was told until investor closes the home they can not ratify my contract. The Realtor has used my contract to get better offer and he did it. Now he is saying me that he will put my offer as back up offer and in case primary contract has some issue with finance etc mycontact will become the primary.

Can somebody tell me what are my options at this point?
I do have the lender information. Is there a way I can find out the lender information and let the lenderknow about my offer and sabotage the Realtors and investors plans? Please help and advise.

2

the lender won’t listen to you since you aren’t an authorized party. who cares just move on to the next deal. if the property was already under contract there is nothing you can do.

3

okay. Can I go through my realtor? Is there a way to find out the lender name?

4

Don’t work with realtors like that or you’ll just spin your wheels. Work with FSBOs who will give you limited power of attorney and warranty the deed.

5

I don’t think you understand, this is not a scam!

If you or I own a property and we miss payments, maybe we get to the point a notice of default is served and we know we are down to x number of days, we look around and find a realtor knowing it is better to sell it rather than to let it become forclosed.

Because the agent is running out of time and knows the process needs to be started with the lender to get the preliminaries started, the agent calls an investor or investor group they know and asks them if they would be interested in making an offer on the property.

A good agent knows they need an offer, any offer to get the process started, it may be a crazy low offer, but it gets the loss mitigation department busy and starts the ball rolling.

I don’t think there is any way a realtor convinces the bank of anything right off the bat, that is a process even for the most seasoned real estate investor that takes a little time.

I think what you describe is a huge conflict of interests for the real estate agent, there broker and the franchise they work for!

I think it is more likely the realtor is still representing the seller and the lender or lenders and is trying to sell the property to the highest contract offer, you as an investor can only offer so much money and still make a profit!

An “End Buyer Family” can offer closer to FMV (Fair Market Value) as they will actually be living in the house, and can pay much more than you can as an investor.

Does the end justify the means? Maybe in the case of a seller who really needs a short sale to save there credit. But to you the investor you feel used and short changed because you after all had to do your due diligence and have your time invested.

Neither you nor the investment group get the house, but rather the best offer the bank and seller except.

Welcome to the world of investing!

This is one of the reasons I do not do short sales anymore! Hours on the phone, endless paperwork and the hurry up and wait!

6

I called it scam because Seller realtor did not follow short sale procedures. Is not it required to realtor to list this property before a low offer is accepted from investor? I think bank should not accept a offer until they see home was listed on MRIS site atleast for five days.
Thoughts???

7

Sellers (Family in Default) realtor has to submit an offer just to open short sale negotiations between seller, any potential buyer no matter how silly or low the offer is and the realtor.

Realtor finds out from this initial submital where the lenders parameters are and where to start a asking price for the property.

Submittal silly lowball offer $200k
Most short sales go (For Example) listing price $240k.
Offer #1 - $240k
Offer #2 - $245k
Offer #3 - $250k
Offer #4 - $255K

Excepted offer $255k on $290k FMV Home.

Lender nets $240k

Discount under FMV - 20% This is about the most loss most lenders are willing to except without just foreclosing and re-listing property as an REO for $289,950.

When it is a short sale listing, the realtor has to have lender set the listing parameters and what the may except minimum.

8

Thanks all!

9

Basically the realtor did nothing wrong (Just an aside, I’m also a realtor). Depending on the laws in the state, usually the basic minimum is that the realtor is supposed to present your offer. There are no rules after that. What the bank or seller does is entirely up to them. They never accepted your offer so you have no basis to complain about anything. For instance someone could have submitted an offer for $230k cash, close in 30 days or less, no home inspection. You offer $240k with mortgage contingency and home inspection. The seller or bank could just as easily decide to accept the lower offer as they know it’s more likely to close. Basically it sounds like the Realtor was asking for a highest and best offer and didn’t put a deadline on it. A better offer came in and he accepted that one.

Move on and find the next deal. With my buyers, some like to play around with low balling and I tell them it’s not going to work, but they want to try so I go ahead and do it. After they lose a few times, they get the message and stop lowballing. But people always seem to feel that they have to start lowballing first.

10

The big problem is that you are still running around with realtor who is not in your best interest. I get the requirement that a house has to be listed waived all the time. I avoid dealing with realtors. PERIOD. I deal with them when an end buyer is needed for the property.

Your contract is not recognized by the bank if the realtor has not presented…SORRY. That is why you have to be in control as much as you can.

11

In my case the seller realtor is deciding the best offer not the bank. If I find out that bank has sold the home to the person whose offer is much lower than mine, Can I let the bank know about it?Thoughts???

12

You can spend your time to tell the bank that your offer is better than anyone else’s but with all of the foreclosures going on in the country, you would be better off finding another deal. I work with realtors, but they understand that they only present my offer to tie up the property and then I negotiate the deal and the realtor finds the end buyer for me. This ensures that I still keep control of the property and negotiations and that I free up my time to find other deals as the realtor also finds deals for me. Find a good realtor and use them. Plain and simple. Also, this realtor might of asked you what you were going to offer to build his/her buyers list when the investors want to resell the house after negotiations.