Kickback is such a STRONG word!:0) I personally don't know any agents who are writing deals that have anything other than closing costs, prepaids and rarely a seller carry back involved. As long as this is up front and all involved parties know about it, I don't think that you can call this a kickback.
As Kris asks, is this what you're referring to?
Bob Mitchell
ValueList Real Estate Services, Inc.
I'm a little confused about the issue. Are these monies that are paid by the seller to the buyer coming out of pocket or is it coming out of the loan?
Thank you to all who responded so quickly. Let me clarify what I was talking about.
What we are seeing on occasion is a purchase agreement being accepted and then on a seperate addendum, the buyer requesting large amounts of money to be returned to the buyer for things like home repair and remodeling when the home really does not need it. Here is an example:
Fair market value-$250k
Purchase price- $300k
Amount returned to buyer on seperate agreement-$50k (remember, the lender does not see this)
In our market that is becoming more and more prevailant. THIS IS FRAUD. According to NV law, if the concession is not on the original purchase agreement where the lender will see it, the it is FRAUD. I bring this up because our Las Vegas market is ahead of a lot of others and I want brokers, managers and AGENTS as well to realize that this may start happening around the country.
In response to the "kickback" statement, I was just making a point that some agents may be enticed in doing these types of illegal transactions by being offered a pert of the money coming back to the buyer, outside of escrow and without broker knowledge. I am not a lawyer, nor do I intend this to be used as legal advice. I want others to watch out for thier cliens and agents and not get caught up in something that can call for license revoction and or jail time.
Like I said earlier, rumors have been flying around our market of top agents, lenders and title/escrow officers being indicted for doing these types of transactions.
I'm glad you 're writing about this Ernie. I wanted to make sure I understood if we were talking about out of pocket money or LENDER money. Yeah this is shady stuff and it makes my job as an appraiser really difficult because I think a potential comparable property has sold for 300k but actually it has only sold for $250k. And there's no way for me to find out the truth about the terms of the sale. It's not like anyone is going to admit to it. This is ONE of the reasons entire neighborhoods had values inflate so quickly. Appraisers using faulty data. I'm going with my instinct a little more when I pull comps now.
If you know of someone doing this Ernie, you should report it to the appropriate authorities. Or you could report it on the website below which directs all potential fraud reports from its members and non members to the proper authorities for you. These agents are nothing more than bank robbers. It's not ok to rob the bank!
http://www.mortgagefraudwatchlist.org/
Thanks again everyone. I hope this information will open your eyes and help in the future. Please don't let this stop here. If you Know of someone who may be doing this or is new, please pass this information. If you have more comments, don't hesitate no matter what they are, positive or negative. I am a grown boy and can take critasism, (can't spell though).
Thanks-
Ernie
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