Short Sale Scams Dupes Un-Suspecting Realtor....Are You One?

By
Real Estate Broker/Owner with Liberty House Realty LLC

Be very careful with who you do business with.

Here lately, many Realtors are be contacted by people who claim they can expedite the Short Sale process or offer you double commission on your Short Sales. Be careful!

These 3rd parties (typically investors or an investment firm) offers to negotiate the Short Sale on behalf of the homeowner and, all you (the original Realtor) have to do is set back and let them run the show. sounds great...right? Well, it's not and let me explain why.

First off, only 4 people are allowed to represent a homeowner when selling their home and they are....

1. A licensed Realtor

2. A licensed Mortgage Broker or Loan Officer (available only in some states)

3. A qualified housing counselor by a government agency

4. An Attorney

Because these "investors" are not one of the above but, you allow them to work the deal (because their recent advertisement to you said, they do it all and, well.....you let them) then you (the Realtor) just became negligent in your fiduciary duty to the client and they are involved in illegal representation.

Ok, so the Realtor (original Realtor) got the bank to agree to a price of $100,000.00 for the Short Sale. The "investor / 3rd party ", who wants to "help" the Realtor sell those horrible Short Sales, negotiates a deal with a buyer for $125,000.00. When the buyer goes to close, the bank is shown a closed deal for only $100,000.00 and the "investor / 3rd party" walks away with the additional $25,000.00. The really sad part is the original Realtor is none the wise and all he knows is he got double commission because the "investor / 3rd party" offered him the buyer's side commission and he got the listing side commission from the bank. So, now the un-suspecting Realtor has broken his fiduciary responsibilities, mortgage fraud, un-ethical behavior and whatever else they can throw at you.

I am really surprised to see some of those similar companies advertising in this group but, I guess scam bags can be anywhere.

Realtors, if it sounds too good to be true, it most likely is.

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Rainmaker
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Jim Valentine
RE/MAX Realty Affiliates - Gardnerville, NV

Jessie - I like your thought process -well laid out.  You're right - there are people making a buck from this situation that have no business being in our business.  We had a lady call us awhile back that had been called by a company that would help her with her default situation.  She gave them $5,000 and then they gave her their advice:  "Pay your back payments."  She was devastated.  They should be in jail.

May 13, 2009 01:33 AM #1
Rainmaker
1,482,426
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

it is funny, when i searched active rain for this topic, the first result of my search was: make 6-9 % commission working with us. lol, funny. or sad....well, this is one of scams a stressed homeowner is going through.....just one of. And greedy realtor helps to make it happen.

Mar 18, 2012 04:51 PM #2
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Rainer
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Liberty House Realty LLC

Turning the American Dream into Reality
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