Most foreclosure agents are reputable but some are still pulling shenanigans. Over the past 4-5 years some foreclosure agents had set up shadow companies that did the maintenance and securing of the foreclosures they took care of. That was okay. What wasn't OK was when the foreclosure agents feed the great deals to their friends and shadow companies they had set up.
There were certain agents in the metro Detroit area that were flipping 100 homes a year by getting the first dibs on the foreclosures. They would paint and carpet them and flip them for a profit. Fannie Mae and Freddie Mac have stepped up and put in the first look program. This is where owner occupant buyers have the first right to buy the home.
This has put many of these shady deals out of business. But my friend tried to buy a White Lake foreclosure two weeks ago. I wasn't the agent as he has a brother in the business. The White Lake foreclosure was sold the same day to a cash buyer for the list price of $65,000 even though there were two other bids.
They did not do a highest and best which makes the whole deal very suspect. The other two bids were $105,000 and $126,000 mortgage bids with 20% down. Now this was a Freddie Mac deal which means it is our money they are losing when they take a low ball bid. The home would have easily appraised for $130- $140,000. I don't know why it was listed so low.
The White Lake foreclosure was in relatively good shape too!
I understand cash usually wins. But when it is double the price and no highest and best offer is put out then I think there is shenanigans being pulled by the listing agent. I told my friend to look up all the Freddie Mac employees on Facebook, Linked In, and on the web. I told him to email them what happened and ask for help.
Well it must have worked because yesterday the home came back on the market and now there is a highest and best on the home. So my friend has a chance to at least put his best foot forward. He may not still win the home but he at least has a reasonable chance to.
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