Do your homework - if you don't, it could have legal consequences.

By
Real Estate Broker/Owner with Cornerstone Business Group Inc 0225086119

Do your homework - if you don't, it could have legal consequences.

Real estate is not exempt from con artists and slime-balls. You already know that, but some scammers are more talented than others. If you're not careful, you can find yourself in a tornado of excitement at the initial contact, strung along by a scheme that is couched in the proper language by a con artist who has done his homework, who knows who the local players are and uses their names to convince you he's legitimate. 

Thirty years ago, this kind of scammer would make quick work of a starving agent who was hungry for a deal, and to top it off, he'd make sure he found one who is a listing agent ready to get both sides of the deal in a dual agency situation. Visions of a big paycheck cloud the mind and casts all reason aside, and suppresses any gut feelings that might pop up right before throwing them out the window.

Last week, I had a fellow call about one of my listings. He knew the right language, asked the right questions and said he'd get back with me. A few days later, he sent a Letter of Intent on the listing. It was a full price offer with limited contingencies and a quick closing. My client has family issues that makes him more susceptible to a scam. 

I, on the other hand, tend to be bit more suspicious. I guess working in prisons for 16 years has tuned my ear to lies, manipulation and cons. I've sold three houses in three years to people who never came to the area to see them. It always makes me nervous. In one case, I knew the buyer from CO. No problem there, but the last couple never saw the house, and they love it today. Whew! I felt like I dodged a bullet on that one.

In this case, my spidy senses were on high alert. Sure, the caller was saying all the right things. Sure, he had a good answer for every question. Sure, my seller really needs to sell, but no one would know that but me. In his letter of intent, the buyer mis-characterized one expense that no talented investor would miss. That set the alarm bells, that were already on a hairpin trigger, off. I didn't bring it to his attention because I wanted to see if he would continue down that path. He did.

Today, I started searching for information about this guy. He is a convicted money launderer, a convicted real estate investor fraudster and he has preyed on other sellers conning thousands of dollars out of them. Thank God for the Internet. His court cases are online in full display for everyone to read. 

I assume he didn't think anyone would research him, but he was wrong. This guy is a smooth talker with a history of dishonest business practices. He knows the language of our industry and he knows how real estate deals flow. He also does enough research to know who the local players are. When he approaches an agent, he has done his homework and he knows how to sweeten the deal to make it appealing. He hopes to get agents who need a paycheck "right now" to work with him.

The ultimate outcome is that the seller will lose a lot of money and the agent will be in financial peril for not doing his/her due diligence as the seller's fiduciary. The scammer tries to make everything happen as quickly as possible to keep the agents eyes off of things that don't sound right. A nice five digit payday in less than 30 calender days with very little effort can be disarming. Do your homework, friends. There are consequences if you don't.

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Ambassador
3,750,499
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Mike- sometimes when those hairs on the back of your neck stand up, you need to take heed. Some of those too good to be true deals are just that. 

Apr 08, 2019 08:07 PM #1
Rainmaker
3,152,852
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Mike I had a land listing that was very similar to what you described... $22.5 million list price and full price offer... really??? my radar was up... a scammer...Endre

Apr 08, 2019 11:57 PM #2
Rainmaker
2,458,113
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

Back in my 1980s early days as a Realtor, I came across a situation that made the hair on the back of my neck stand up, but I couldn't figure out why until I was nearly in the thick of it.  A guy had called to list a luxury home in an upscale community.  When I met with him, he presented a power of attorney from his son, who was resciding in another state.  No sooner had I put the home on the market that I got a call from a woman who asked questions about the home, with one very curious question at the end, "Myrl, if you get an offer on this home, would you please let me know?"  When I asked her why, I found that she was the ex-wife of the actual owner.  The actual owner was out of state alright.  He was in prison for check-kiting, which was why his father was trying to sell the house for him via that power of attorney.  And, to add insult to injury, the ex-wife's signature had been forged to get her off the deed.  And, her forged signature had been accomplished with the help of a notary, who was now the new girlfriend to the guy in prison.  Needless to say, I handed the listing back to them! 

Apr 09, 2019 01:06 AM #3
Rainmaker
2,458,113
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

CONGRATULATIONS Mike, on having this blog FEATURED in the Old Farts Club group!  

Apr 09, 2019 01:08 AM #4
Rainmaker
2,805,037
James Dray
Fathom Realty AR LLC - Bentonville, AR
Exceptional Agents, Outstanding Results

Morning Mike.

I'm sure, most agents in my area do not check all of the potential buyers out like you do.  That feeling you get in your gut works, doesn't it?

Apr 09, 2019 02:51 AM #5
Rainmaker
3,165,406
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

Listening to your little voice often gives you the right answers.

Apr 09, 2019 02:54 AM #6
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Rainmaker
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Mike Cooper, GRI

Your Neighborhood Real Estate Sales Pro
Winchester has a place for you! Call me.
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