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Follow up on Georges blog Cash back

By
Real Estate Agent with Keller Williams Realty at the Lakes

Just read a blog by George Hanson about cash back and gifts.

At a recent course I attended every attorney licensed in Florida and one from Alabama in the room said they wouldn't do it because of the Rico law  ( I think it has to do with money laundering not sure) and the fact that the money rebated from the broker would be a 1099 issue too.

Yes I know people do this in Florida but how many are 1099 the amount to the buyer or seller? 

Most discusting was the fact that a local broker which will remain nameless had purchased many homes in a couple developments and sold to new buyers at a higher price with rebates.

Well hello guess who paid the price for the rebate?  What would the buyer think once they found out it could have been purchased for less direct.  Reflects badly on all realtor professionals when a few rotten apples spoil the bunch.

Other cases were sited but from all that was said doesn't sound like a practice any broker should be mixed up with..the tax attorney there had a field day with this too.

 

David A. Podgursky PA
THE PODGURSKY GROUP @ Re/Max Direct - Boynton Beach, FL
THE PODGURSKY GROUP - Make the Right Move!

I just came across a sale that was likely a cash back deal

I had a client that couldn't get that unit as a comp because it was so far above the other comps...

the thing that made me believe it was a screwy deal was when Nick M and I were talking about it and he said that it was just way out of line... so I found the appraiser and called.  No answer... I had my processors call him every hour.  He would NOT do an appraisal for us.  I didn't want a BAD appraisal... but his refusal to do any appraisal put me in the mindset that there was just something amiss.

plus - lending guidelines and appraisals are too tight right now.  Buyers won't and can't buy over appraisal so these cash on the side deals are increasingly "POC" Paid outside of Closing... 

Feb 20, 2007 03:28 AM