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Consumers....Watch Out- Would Your Realtor® Jeopardize Their Real Estate License with this deal? Part I

By
Real Estate Agent with Brokered by eXp Realty LLC SL # 3014652

Something smells fishy with this deal

Ok ...here is todays scenario of an offer I received about a week ago. Now just to let you know...this offer was presented and rejected by the seller offering no reason other than a chuckle. You see...I have this listing which is an REO and the sellers basically own the mortgage because the property went into foreclosure and an asset holding company now is the holder of the current mortgage.

It really doesn't have anything to do with the deal or the offer so here is how the story went.

I came into my office and see a 12 page fax. Before I can look at it further I started to get excited because when I receive a fax with that amount of pages my sixth sense tells me it is an offer on one of my listings! But this was becoming more unusual as it went along. First of all...no agent ever called me to let me know they were faxing me an offer and usually we get some sort of contact just confirm it...that didn't happen on this one.

So I start reading the contract and by the time I was half way down the first page the big red light went off. I continue to read and as I browse through it I noticed many things that I did not like to see. I'm just going to give you the basic facts and not the entire contract...only the important stuff. Just to let you know...this property is a 3 BR 2.5 Bth 1 car Gar. on a small lot in need of some TLC. Most foreclosed properties need work but this one was actually in pretty good shape from what I usually see in this situation with no upgrades and it is listed at $299,000.

At fair market value from my BPO it is generally worth between $330,000 to $360,000 in average shape. But because of lack of activity we priced low enough to attract  buyers and out of 90 homes available on the market in this neighborhood it is the cheapest one. I know this because I lived there and have farmed the area for many years. But let's now get back to the offer.

The offer reads as follows...

Purchase price------------  $350,000

escrow deposit --------------  $2,000

other-gift of equity----------   $87,500

financing-------------------   $262,500

cash to close------------        -$2,000 minus.."yes that is a minus sign"

AS-IS with right to inspect

Purchase price based on $260K net after these costs...buyer would pay any sellers closing costs above the $260K purchase price. Pre-approval letter was for $260K.

I would love to hear from Realtors®...mortgage pro's and appraisers with their opinions on this.

Read on-> ...it gets better.

 

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Posted by

Neal Bloom

Comments(83)

Karen Monsour
Coldwell Banker Fort Lauderdale Beach - Fort Lauderdale, FL
REALTOR, SSRS - Sells FL Waterfront, Short Sale Expert!

Neal,

I had someone who wanted to cash out between $70,000 and $100,000 per deal. Had his own bank, own title co. etc...so I know the fraud associated with actions like these.   :-)  

Karen

Oct 14, 2007 05:40 AM
Robert Hammerstein -
Christie's International Real Estate - Hillsdale, NJ
Bergen County NJ Real Estate

Hey Neal,

In our state, you must present written offers within 24 hours.  Hey do ya' have to have a license in medicine to do a pencil search?!  Yikes!  Sounds painful :(

 

We left you a message on your voicemail.  Would love to chat!

 

Oct 14, 2007 06:45 AM
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Karen,

Nice deal you had there..I'm sure he also has a sub-shop in the back so they can stop for lunch and write it off:)

Hi Lisa,

I did get your message and will be calling you back most likely tomorrow if that is ok...I was doing the an open house for Midori's parents and just got back. I figured you wanted to enjoy the rest of your weekend and would try you during the week.

Oct 14, 2007 09:47 AM
Barbara Mulcahy
Re/Max Integrity Advantage - Berkeley Heights, NJ
ABR, CRS - Your Berkeley Heights Real Estate Source
Hey Neal - sounds like Tony Soprano is buying real estate in Florida :)  Glad to hear you turned your back on this one.  Wow, some people will try anything!
Oct 14, 2007 01:13 PM
Ginger Allen
RE/MAX Advantage Realty - Annapolis, MD
Greater Annapolis Md Area
Yep!  A sure sign of mortgage fraud.  I hope you reported the folks to the real estate commission...
Oct 14, 2007 03:32 PM
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Barbara,

Yup...I guess for money...greed is god.

 

Ginger,

I'm going to ask my attorney whether it is worth pursuing.

 

Oct 14, 2007 11:02 PM
Thomas Weiss
Thomas R. Weiss - West Palm Beach, FL

Neal,

I am just saddened that you have to deal with this. I also must say, that this is still very common practice, Crooks are Crooks. Great Job keeping your Cool!!!!!!

Tom Weiss

Oct 15, 2007 01:17 AM
Stella Barbour
NoVa Brokers LLC - Vienna, VA
Principal Broker, Serving Virginia and Maryland
With all of the Federal investigations going on, I can't believe people haven't taken a break for this dishonest behavior.  I just can't believe that this is going on.  I guess it never ends.  I am sure there are still people here doing it but I haven't come in contact with them.  I would report it to the Federal Government that is handling all of the fraud cases and have them investigate this agent.
Oct 15, 2007 01:28 AM
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Tom,

No need to be sad...the offer was rejected and they have not come back to us.

Stella,

Money and greed always blinds people that are involved in this sort of behavior

To all,

I have asked the opinion of a sort of expert in this and he will soon be leaving his view here. You might be interested in his response.....

Oct 15, 2007 03:03 AM
Kerry Jenkins
Prime Properties - Crestline, CA
That definitely sounds like mortgage fraud, and I would turn that "agent" in .  There's no way that agent is a Realtor, much less a licensed agent.
Oct 15, 2007 08:02 AM
Christy Romano
Apex Mutual Mortgage Corp - Port St Lucie, FL

It seems to be fraudulent all the way around, especially since the few lenders that will do a gift equity require it to come from an immediate relative only ie, parents, siblingss or spouses only..no 3rd cousins or a cousin of a cousin. They also want proof of the relationship such as a birth certificate or marriage license. I've done a couple of these loans and have had to submit such documentation. Lenders verify everything and reverify everything these days. Plus most will only allow a 3% seller concession.

Oct 15, 2007 11:29 AM
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Amy,

I hope you had a chance to read the whole post. I have been advised that it would premature to accuse when they might only have tried to commit but didn't actually do it.

Christy,

Although it was disclosed to the lender based on the approval of only 75% of the loan it still was disclosed and unless they were able to commit it and then be guilty then would there be cause to go after them ....everything looks like it but there really is not proof the alleged crime was ever committed and yes if you clicked on some of the links you will see you are correct...usually a gift of equity is only with a family member or relative and my client is neither.

Oct 15, 2007 11:35 AM
Michael Eisenberg
eXp Realty - Bellingham, WA
Bellingham Real Estate Guy

What a story, it is just amazing what some people will come up with

SOme new things for most of us here - gift of equity & pencil appraisal

Oct 16, 2007 01:19 PM
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Michael,

Welcome to my little world:)

Oct 16, 2007 01:23 PM
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Karen,

You already heard the story...I'm waiting to hear from someone that was in this situation on the other side. Whether or not you feel differently is understandable but you do not need to get upset...you can't accuse someone if there is no evidence of this crime actually being committed...do I take a chance and report someone when the authorities will not pursue this? No ...because although the facts look right does not  mean I can jut assume.I need to look at this closer. If I didn't believe this was happening then I would not have written the post but until there are harder facts...I need to let it be...and why can't I hear from others? This post was written for thoughts form all different areas of our business and I want to get more than just the Realtors(R) perspective.

Oct 16, 2007 10:51 PM
Karen Monsour
Coldwell Banker Fort Lauderdale Beach - Fort Lauderdale, FL
REALTOR, SSRS - Sells FL Waterfront, Short Sale Expert!

Apparently I misunderstood what you meant by your comment that you were waiting for an expert.  I apologize and have removed my comment.

Karen

Oct 17, 2007 02:37 AM
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Karen,

Why did you remove your comment? This post is open for debate as well..you weren't bashing me or anyone else...your comments are welcome and there is not reason why you needed to delete it. You are entitled to your opinions just like anyone else so don't worry about it:)

Oct 17, 2007 02:43 AM
Lizette Fitzpatrick
Lizette Realty - Richmond KY - Lexington, KY
Lizette Realty, Lexington KY MLS - Kentucky Homes
Wow! That's some crazy stuff! I'm glad that offer wasn't parked on my fax! It would be a shame to waste so much of my hard earned paper and ink.
Oct 17, 2007 03:16 PM
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Lizette,

I don't mind seeing them...I get quite amuzed at these types of deals and the alleged way they try to present it.

Oct 17, 2007 11:20 PM
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate
If anyone is interested in my follow up to this post you might want to read Mortgage Fraud- thoughts from Ed Rybcznski-Mortgage Fraud Speaker & Expert
Oct 19, 2007 01:17 AM