zk wrote: So what was the benefit to the buyer to participate in this scheme? He’s going to pay higher property tax because of the higher purchase price, so there must be some benefit to him. What is it?
Because now he can just turn around and list it at the exact same price and sell it to someone who is getting financing. He’ll call it a “deal”. “Look, I won’t even raise the price. I just decided I didn’t want the house after all.”
The new buyer, surely completely unaware of the cash back scheme, pays “fair value” for the house, while this new seller makes a quick $70k.
And the scheming seller is probably also a RE Agent who is looking to sell other properties in the same area needs the higher comps. This was how the whole bubble happened in the first place. But in the past they would use the leverage of false equity to drive up prices. This way is a little harder since you need to do an all-cash deal to get the ball rolling. But it’s essentially the same BS as the bubble.
It’s more reason why NAR should change their “ethics” code so that Agents must disclose ALL properties in which they have had an ownership interest in the last five years to all of their clients.
