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I don’t care what your buyer needs, I’m not with holding a document from title

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% 2^nd, 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 2^nd 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

Posted by Todd Clark (Broker) (503)524-9494 (Beaverton, Oregon Real Estate Expert) on 07/16/2008 08:14 AM

Comments (15)

mortgage fraud, jail, owner 2nd, owner second, offers, beaverton oregon real estate, tigard oregon real estate

Originally posted at: Living Beaverton - Your guide to everything Beaverton: I don’t care what your buyer needs, I’m not with holding a document from title

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15 Comments on I don’t care what your buyer needs, I’m not with holding a document from title

JUL

2008

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.

When it sounds too good to be true, it usually is.

Turning the agent in to RMLS might not be a bad idea. Can't believe that in the wake of everything that is goingon this crap is continuing to happen. Glad that you were able to explain it to your client so that they understood.

Todd, where did the ethics go with this Buyer's Agent? Oh yeah, I'm being naive in the world again. Wow, that agent is headed for future trouble if he doesn't know the difference between right and wrong.

Todd: It's simply mind blowing to think after all this mortgage mess, that there are still agents out there doing whatever they can to make a buck. That buyer client needs to be fired, but the agent is too greedy to see where this can lead. We had a Realtor in VA jailed for four months for loan fraud. I wouldn't want to spend FOUR DAYS in jail. I love my job and nothing is worth risking my credibility and my license.

I can't believe that people are still trying to pull these kinds of shenanegens! I never thought what the fsbos might do in this sort of situation. So much to consider!

Basically, everyone needs to understand that there is no 100% financing for investment property, no matter who is holding the 2nd. The seller could agree to care an 80% 2nd, but that would still be a 100% CLTV, a real no no in the mortgage business. I would be interested in knowing which lender they found that would go along.

You might want to have a chat with the broker's principal broker. You can't pay enough E&O to cover things like that.

Melina,

Actually, E & O will not cover fraud.

Todd,

As Melina suggested, someone, namely you our your broker, should talk to the other broker's BIC or principal broker or qualifying broker or whatever the term is in Oregon. That other broker is setting his BIC up for a potential lawsuit and worse.

You might also consider filing an ethics complaint (Articles 2 and 11) although you do not have anything in writing. Watch the MLS records and see if this broker succeeds in selling something and you may then have the assistance of that listing broker in your case.

From what I can tell it's rare for an agent to file a complaint against another agent. It's more common for the general public to make a complaint. The complaint packet issued to the general public in KY, so I've been told, are about 15 pages long and packed questions that are expected to be completed in detail like a legal document.

If I filed a complaint against another agent every time I had a gripe, even if the agent deserved it and then some, I wouldn't be a very popular person to say the least. These crooked agents already have a reputation.

And another testimonial to how important it is to have a REALTOR(R) on your side!

Not that it is good to commit fraud in any market, but the banks are REALLY on the lookout now and will be for sometime.

I wouldn't touch a deal with that buyer and I would file a formal complaint. That goes above and beyond wrong.

JUL

2008

OMG! You've got to be kidding. I think that the Buyer's Agent can't possibly claim ignorance. I find it interesting that he 'forgot' that one tidbit of info. Ironic - or not.

Your client is lucky to have you watching out for him. This could have been messy.

I had an agent last year looking at a new contruction home where I was working with the builder. Things seemed to be moving along, and then one day the agent calls and asks if the builder would be willing to "gift equity" to the buyers after closing.....I said "do you mean like laon fraud?" He never called back. I told the builder and he was glad that I had chased them off.

Todd- Where do these agents get their training? Yipes this is crazy. I would definately talk to someone about this. Since you are the broker I think you should speak to the others agents principal broker- Just a heads up as to what is going on.

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