Bogus Cash Offers - NOT a good way to deal with low inventory.

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Real Estate Agent with Better Properties Seattle
https://activerain.com/droplet/4dZm

Here in the Seattle Area it is not unusual for a good home, priced well, to get lots of showings on the first day (my last one had 18 showings the first day) and for an offer to be submitted and accepted pretty quickly. Often within 24 to 72 hours.

I understand that buyers find this to be frustrating and agents are looking for a way to work with this problem, but submitting bogus cash offers is NOT a good "work around" IMO.

At this point it is getting a bit easier to spot this unethical behavior. Agent brings an OVER full price cash offer with a Home Inspection contingency and other legal out clauses within hours of the property being listed. A quick check shows that the agent never showed the property.

The first time it happened on one of my listings the agent swore up and down that the buyers HAD seen the property...even though they lived out of State and were not in this State when I received the offer. The most recent one the agents...there were THREE of these, at least didn't lie about what they were doing. Just trying to tie up the property so it wouldn't be gone by the time they could show the house.

Best I can tell, there really is no law against this activity. 

 

I was wondering if anyone else is seeing this around the Country...or if any of you are doing this yourselves.

 

I know low inventory is a big problem...but there's gotta be a better way. It really isn't ethical...fair to the seller of the home...but a law against it? I haven't been able to find one...yet. Maybe it's time to make one.

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Rainmaker
422,216
Catherine Ulrey
Keller Williams Capital City - Salem, OR
Equestrian and Acreage Property Specialist

I dont' have time to write bogus offers, just to tie it up.  I can't believe people are doing this!  Wow.

Nov 12, 2012 10:12 AM #1
Rainer
172,714
John & Irma Nelson
San Antonio Real Estate Broker/Agent with Get It Sold Realty - San Antonio, TX
San Antonio Real Estate Agents - San Antonio Homes

i have not seen much of that going on down here but that doesn't mean it isnt happening.   I know in the hot areas and limited inventory it happens however

Nov 12, 2012 10:13 AM #2
Rainer
305,758
Brad Rachielles
CENTURY 21 Peak, Ca BRE# 01489453 - Upland, CA
REALTOR, CDPE, Upland, CA

Are the earnest money checks current and identifying the one specific property?

Nov 12, 2012 10:37 AM #3
Rainmaker
304,760
ARDELL DellaLoggia
Better Properties Seattle - Kirkland, WA

Brad,

On some the Earnest Money is deferred until after the Home Inspection which is a standard addendum on all offers by one major and reputable company in the area. On another the check had no name printed in the top left corner which made me wonder if the agent had written it on a checkbook he keeps for that purpose. I was tempted to go to the bank to see if it was an open account, but the Earnest Money was later wired into the account from the out of State buyer who cancelled later.

On that one my guess is they tied up a few properties, then came to town and cancelled them all. It was as if they were collecting some homes to see when they arrived. They did buy a house but a couple of months later and with the same agent.

On the most recent one we were lucky to get a "real" offer almost as quickly and before we had to respond to the first over priced cash offer. It's hard to respond by saying "I think this is bogus" because you never saw the house. Some answer that they don't need to see it to know they want it. :(

 

Nov 12, 2012 10:46 AM #4
Rainmaker
139,554
Vicki Lloyd
The Lloyd Realty Group - San Diego, CA
(619)452-9798, Real Estate San Diego California

We have the same problem in So Cal.  Wondering if we could counter offer : "If escrow cancelled prior to paying for professional inspection (or appraisal) earnest money deposit to be forfeited to seller."

Even if they didn't agree, it might at least reveal their true intentions!  :)

 

 

Jan 04, 2013 05:59 AM #5
Rainmaker
1,046,078
John G. Johnston
John G. Johnston & Associates, LLC - Westcliffe, CO
An Exclusive Buyer's Agent ~ Westcliffe, CO

Ardell   I really liked Vicki's suggestion.  I don't want to see another law but I certainly like a legal way to deal with unethical agents/buyers.

Feb 10, 2013 06:21 AM #6
Rainmaker
304,760
ARDELL DellaLoggia
Better Properties Seattle - Kirkland, WA

To Vicki and John,

 

Won't work as the bogus offers have a real inspector come in...find something wrong...and leave at a small fee and much less than a full inspection. Doesn't take an inspector long to find "something" wrong if that is what their objective is.

Feb 10, 2013 07:00 AM #7
Rainmaker
1,046,078
John G. Johnston
John G. Johnston & Associates, LLC - Westcliffe, CO
An Exclusive Buyer's Agent ~ Westcliffe, CO

Ardell  (and Vicki)  So now we have unethical inspectors too!  Colorado is going to start regulating inspectors and this should be classified as unethical.  How could someone word a Counteroffer that the earnest money is nonrefundable or only 50% refundable with a cash offer?  Gotta be a way.

Feb 10, 2013 07:07 AM #8
Rainmaker
262,651
Robby Leviton
Keller Williams Realty - Kirkland, WA
Knowles Team

I have not seen or heard of this as of yet but will keep an eye out for it.

Mar 18, 2013 11:12 PM #9
Rainmaker
971,111
Beth and Richard Witt
Long Island Cash Home Buyer - Huntington, NY
Long Island Cash Home Buyer 516-330-6940

We still have tons of inventory but when a house is hot the listing agent needs to be on their toes because anything can happen and usually does...  liked your post!

Jul 22, 2013 07:18 AM #10
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ARDELL DellaLoggia

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