Are you willing to overpay for your home in New Milford, CT right from the start?
Is it fraud? Is it just a way to make money? Is it ethical? Is it legal?
I was wound up inspired by Realtor® Bill Gassett, Metrowest Massachusetts Real Estate about short sale fraud. I have written about this myself and gotten spanked by investors and real estate agents alike who told me, in no uncertain terms, I was wrong. I applaud Bill for 2 wonderful posts he wrote on the subject, and now it is Bill's turn to get spanked. He is holding up well I might add. You should check them out. And please, be sure to read the comments on the second blog of Bills. My cork popped...
Short Sale Realtors vs. Short Sale Investors/Do Lawsuits Wait in the Wings?
Beware of the Short Sale Investor/Short Sale Fraud
There are many different scenarios to this play. Let me be very brief with one simplified example.
- Homeowner has a short sale to sell.
- Investor will purchase home for 150,000, proves to lender this is all it is worth.
- Property is still being marketed at a higher price, say 190,000.
- Buyer comes along at some point in time and agrees to pay 190,000.
- Investor closes on property for 150,000, resells the same day to buyer for 190,000.
Many talk about full disclosure, as long as there is full disclosure there is no fraud. I believe this will shake out in time, we shall in fact see. But what is full disclosure?
Here is what I believe to be full disclosure. Put it in the listing, put a notice at the home. Make sure the buyer understands that you got the lender to agree to a lower price, that the lender BELIEVES the lower price is fair market value. (Remember, someone had to prove to the lender it was worth the lower amount.) I want to know BEFORE I take my buyer to this type of listing. I am direct and ask the agents before I show it to my buyer. I have not once seen anything that states, "investor is purchasing this property for 150,000 and will resell the same day to a buyer who is qualified and pays anything over 190,000". That to me, is full disclosure, up front.
Bottom line? Not one, I repeat, not one of my buyers wanted to see any of these homes. Let me make that a bit more clear, just in case...
NOT ONE OF MY BUYERS WANTED TO PAY MORE FOR A SHORT SALE THAN WHAT THE LENDER HAD AGREED IT WAS WORTH.
If you are currently thinking about purchasing a short sale in the greater New Milford, CT area, make sure you know what is going on. You may find yourself in for a big surprise when you fully grasp the concept that you paid THOUSANDS of dollars more than the lender agreed to sell the house for.
Swiedler, Pomerantz &Adams, the Luxury SPA Real Estate Treatment!
Searching for a home? We have an app for that!
Text GLR to 87778
for your free app to search homes for sale right from your cell!
Search homes for sale in Litchfield County, CT.
Selling your home? Check our powerful marketing system.
Prudential Connecticut Realty 27 Main Street, New Milford, CT
Prudential Connecticut Realty is a wholly owned subsidary of HomeServices,
a Berkshire Hathaway Affiliate
© Swiedler, Pomerantz & Adams, 2009 - 2013
Always do right. This will gratify some people and astonish the rest. - Mark Twain