Investors, Greed and a Real Estate Transaction
As a Realtor I assist both buyers and sellers therefore I understand both sides of the transaction. Buyers are competing with investors, it's a fact! However I have witnessed disturbing patterns recently.
I believe many agents are sincerely concerned about the current real estate market. Rumors of artificial appreciation fueled by low inventory levels have caused some to worry another real estate "bubble" is occurring. While others worry about the inroads investors are making in the communities and the ultimate result of these purchases.
There is another concern, some investors are appealing to the basest of motivations - greed.
On a recent listing brought out the investors. In an effort to level the playing field and allow non-investor buyers equal opportunity we listed the house on Friday afternoon so that buyers could view the home on the weekend. We requested no blind offers. (An offer submitted without viewing the home.) Installed a supra lock so agent entrance into the home was verified.
First Offer: the first five offers were from investors. (I wondered if a few of them were legal.) Investors submitted offers asking me, the listing agent, to represent them as the buyer agent. Well I've seen this before so that wasn't shocking.
Next offer suggested I triple-end the transaction. As the listing agent, I would represent the investor as a buying agent and then represent the Investor as his selling agent for a flip transaction.
Third Offer (and this one was new to me.) The listing agent commission would belong to me, I would represent the investor receiving the buyers agent commission, then when the property was flipped I would again become the listing agent and the investor offered me a 5% bonus.
The investor with this final offer was particularly aggressive. He called daily, explaining his "new program" of developing relationships with a Realtor. "The bonus would not appear on the HUD," he stated excitedly. We could even meet for dinner and he would bring the cash.
Whoa..hold-up! Now I hate to say it but this reminded me of shady dealings in dark dive-like clubs where money is transferred to the nervous recipient in a brown paper bag.
Finally I said I knew this was not legal, (it was a short sale transaction), and I would not be participating. After I emailed my courtesy notice to everyone who had submitted an offer I recieved another call from the investor. Could he be in back-up just in case?
Moral of the story: The seller selected a first time buyer one who would love the home just as much as she. Agents beware of investors appealing to greed.