It seems ethics for many Real Estate Agents and even their buyers has gone the way of the Dodo bird in this market. What folks don't seem to understand is not only are their actions morally wrong they are committing fraud and that there may be financial repercussions to be suffered. As far as criminal penalties I doubt that it will ever come to that as it's hard to substantiate.
The newest situation I have encountered recently involves USDA loans in Menifee Ca. USDA will still make a 100% percent loan in certain areas and that, in my opinion, is a good thing for many consumers who are short on funds but have the income to repay the loan. The problem is due to the lack of "normal" properties that are not short sales and the fierce competition and multiple offers on Foreclosure properties (REO) some agents are not disclosing their clients are utilizing 100% USDA financing for fear their client will not receive a fair chance to get the home.
Instead they are saying their buyer is going to get an FHA loan and that is why the initial deposit is low as FHA only requires 3.5% down payment. They feel the seller will stay in the transaction rather than put the property back on the market when they find out what the buyer is doing 20 to 30 days down the road and they even have loan officers verifying the buyer is going FHA. That is the reason I have all buyers cross qualify with my trusted lenders when their offer comes in to present to my seller whether it be a homeowner or one of my institutional clients.
These agents know it takes both the sellers and buyers to sign Escrow cancellation papers in California to forfeit the buyers deposit money. If the escrow is not cancelled the seller cannot sell to another buyer so without a refund of deposit money the first buyer will not sign the cancellation. Sounds a lot like Blackmail doesn't it? It my opinion it is but there are ways for the seller to keep that deposit.
In the past four years I have only had to use the loopholes to keep the deposit 5 times for my seller clients. The dollar amount is just over $19,000 dollars that went to my clients and as for the dollar amount my buyer clients have lost is zero as I don't lie to others and neither do my clients. If I was a buyer and my agent suggested what they were going to do and lie about the type of loan I was utilizing it would make me wonder how much are they going to dishonest with me.
The Golden Rule applies in lfe and even Real Estate. Do onto others as you would have them do unto you.
Helping others acheive their goals whether buying or selling since 1987.