Yesterday I got a call on one of my listings and they ended up spending an hour and a half in the property, measuring, looking at insulation, and checking the electrical. Clearly they were interested.
Then the buyer's agent calls me later that day and says they would like to present an offer for full asking price plus $10,000, but they want the owner to carry a 20% 2nd, at 10% interest and pay the buyer's closing costs.
So, far it seemed like a pretty fair offer for my client since it was an investment property with no mortgage on it. This was a great deal for my client, to make some extra money over the next 5 years of the contract and get rid of the property after only a few days on the market.
After I call the agent back and say that they would accept such an offer and to present it, this is when he dropped the bombshell. "Great, I'm glad your client is willing to help mine get another investment property. Oh, one thing I forgot to mention with you on the phone is that the 2nd can't go through title. We need it to show like he is putting 20% down on the property and then your client can record the contract the day after close, is that alright?"
"Hmmmm...Let me think....NO! That is mortgage fraud and my client nor I will have no part of it!" "We do this all the time and my client says it is perfectly legal as you recording the contract" "Well, got some bad news for you, it isn't legal and you may want to contact your company lawyer and check with them, because it is mortgage fraud and a great way for you to land yourself in jail!"
The offer never came through and my client was a little upset with me, but once I explained what the other person was trying to do and how it could land him in trouble also, he seemed to have calmed down and thanked me for watching out for him. He also asked "How would a person doing a For Sale by Owner know not to do that and not just taking the word of a buyer's agent and the buyer?" I told him, they wouldn't and if they get caught, it would be big trouble for everyone involved!
So, if you have someone telling you for any reason not to give documents to title, then I would question the legality of it.

Todd Clark - broker
Kastings & Associates
Phone: (503)524-9494
Fax: (503)622-8739
You are absolutely right to tell that Buyers Agent NO, and for my part, Not just NO but HELL NO!!!.. I sometimes can't believe how willing some folks are to face a jail sentence at worst and a license revoking just for a few measly dollars. What happened to Ethics and Intergity of that Buyers Agent? Where was his broker's stance on this? I bet the broker had no knowledge of such shady dealings.