"We need an agent who can think outside of the box," the voice on the other end of the phone tells me. This sounds good at first. I love helping my clients get deals done by being creative. However, I soon discover that these are code words for, "We need an agent to help us with an underhanded deal (or two or three)."
Really! When did my real estate license go up for sale?!! Especially to the lowest common denominator. As a professional would it even make sense to risk my entire livelihood for a quick couple thousand dollars? Not in my opinion. Unlike the media portrayal of real estate agents, I am finding that I am very busy. A lot of people still need real estate agents, especially those who are actually able to make things happen as opposed to sitting around hoping for a windfall deal.
It seems that today's real estate market has bred not only a crop of competent, very professional agents, but has also produced alonside them a batch of scam artists looking to take advantage of not only the public but the banks (which hurts the public in the long run). Being on the Internet, I get many calls from folks who need my help, but I'm also a magnet for the unscrupulous types who want to use my license to legitimize their shady operations. Quite frankly, a jail cell is the box that I'm trying to think outside of here.
1) The seller is not aware of what is going on. This should be kind of obvious, but many companies who specialize in helping people out of foreclosure basically do all the work for the seller and have them sign things as necessary. Some people are so overwhelmed by the financial difficulties they are experiencing that they will grasp at any straw to get them out of their situation. I won't be involved with any transaction where everything is not disclosed in writing and the seller is not made aware of the possible tax or legal ramifications of what they are doing.
2) The bank has approved everything but they need an agent to "get the commissions out" - True story, folks. If the bank has already approved a deal, then they have addressed whether or not commissions will be paid, how much and to whom. If commissions are still up in the air, then the bank probably hasn't approved the deal. And if they have, why would the parties involved want to bring someone else in to take a chunk of their payoffs? Common sense here, folks...
3) The identity of the end buyer is concealed - Otherwise known as a double closing, this is illegal in many places. Everything is required to be on the HUD (Settlement Statement) at closing. Now there are legitimate companies whose goal is to purchase low and sell to another end buyer, but if they are legitimate they reveal that not only in the HUD, but in disclosure statements and possibly even in the contract that the seller signs and the bank sees.
4) Everytime you ask a question, things get more convoluted - If I ask questions and the more I ask the more questions I have, a red flag goes up. Granted, on some complicated deals it takes some time to get all the facts straight, but the person trying to talk me into working with him had better have a handle on what is going on and be able to explain it to me. Stammering and round-about answers don't go over well with me.
These are just a few that I've thought of. Feel free to add your own red flags in the comments below. I think I'll keep my real estate license for now. Being a single parent, I could really use the income it helps me produce!