ethical question; short sales

[Coronita]

[quote=urbanrealtor][quote=walterwhite]how could you get a bank to hold up on the sale to look at my offer? I wouldn’t know any of the facts until after the sale were completed, right?[/quote]

Thats correct.
The bank’s client is the owner.
They won’t tell you anything unless they have permission from the owner.
The agent’s client is the owner.
The agent won’t tell you anything because your interests are opposed to those of his client.
The agent has no duty to disclose all facts to the bank as they are not his client.
He has no duty to you either.
Claiming any damages involves proving a pretty far-fetched counter factual (seriously, you are claiming it was your Barbie Dream House? Dude.).
The most effective way to deal with this is to address it at an administrative level.
Respond very positively to the solicitation for the furniture purchase.
Ask that it be in writing (because, hey, you need everything in writing).
Once you have it in writing, figure out the office structure of the other agent.
Go directly to broker or risk manager for the agent and describe this as illegal seller profits and payments outside of escrow.
If this is a big name franchise office (eg Remax or C21), they will have in house counsel.
Showing documentation of fraud (presented by an attorney) will probably make them crap their pants in short order.
You probably won’t get the short sale.
That involves a fair amount of goodwill on the seller’s part (and you have burned that) but you will help to make this practice less common.
Make no mistake, I agree that this is fraud but I also think that the primary victim is the bank (thus my lack of sympathy), the secondary victim is the buyer (and I don’t put a lot of stock in nebulous opportunity cost in this market), and that the actual damage is (intentionally) hard to prove.
I wish you luck.[/quote]

Walterwhite,

Like I said, try to converse over email…People be aware of having stuff in formal writing…But for some reason, some people don’t think twice about writing stuff down on email, because frankly most people aren’t aware of what a big paper trail it leaves…From the time of someone sends you an email, it has already travelled throw many isps, cached at several mail servers,etc.

[davelj]

[quote=urbanrealtor][quote=sdrealtor]Good advice[/quote]
Dave, let me ask, what are the versions of this that you have seen?[/quote]

I’ve seen this twice. Both times very similar stories. The prospective buyers had lost a couple of short-sale “auctions” to folks who were “buying the furniture” and they just threw in the towel and decided, “If we can’t beat ’em, join ’em.” They both eventually got prices they were happy with even including cost of “purchasing the furniture.” A year ago I didn’t even know this was going on. But both of these situations popped up over the last 6-9 months and I got the impression after talking to these folks that this is pretty widespread (it’s probably taken a while to catch on). One hitch is that most sellers don’t want anything in writing and they’ll *try* to get the money for the furniture before the deal closes. But most buyers won’t do this – for obvious reasons – so it becomes an issue of honor among thieves. Both of the folks I know just stroked out the check right after closing and it wasn’t a big deal. I think at the end of the day most folks just think (understandably, frankly), “Fuck the lenders.”

Look, the folks who want lower comps shouldn’t have any problem with this type of behavior. These transactions keep part of the real purchase price off the books and thus depress the comps, all else being equal. So these folks should stop their whining and learn to love it.

[davelj]

[quote=urbanrealtor][quote=sdrealtor]Good advice[/quote]
Dave, let me ask, what are the versions of this that you have seen?[/quote]

I’ve seen this twice. Both times very similar stories. The prospective buyers had lost a couple of short-sale “auctions” to folks who were “buying the furniture” and they just threw in the towel and decided, “If we can’t beat ’em, join ’em.” They both eventually got prices they were happy with even including cost of “purchasing the furniture.” A year ago I didn’t even know this was going on. But both of these situations popped up over the last 6-9 months and I got the impression after talking to these folks that this is pretty widespread (it’s probably taken a while to catch on). One hitch is that most sellers don’t want anything in writing and they’ll *try* to get the money for the furniture before the deal closes. But most buyers won’t do this – for obvious reasons – so it becomes an issue of honor among thieves. Both of the folks I know just stroked out the check right after closing and it wasn’t a big deal. I think at the end of the day most folks just think (understandably, frankly), “Fuck the lenders.”

Look, the folks who want lower comps shouldn’t have any problem with this type of behavior. These transactions keep part of the real purchase price off the books and thus depress the comps, all else being equal. So these folks should stop their whining and learn to love it.

[davelj]

[quote=urbanrealtor][quote=sdrealtor]Good advice[/quote]
Dave, let me ask, what are the versions of this that you have seen?[/quote]

I’ve seen this twice. Both times very similar stories. The prospective buyers had lost a couple of short-sale “auctions” to folks who were “buying the furniture” and they just threw in the towel and decided, “If we can’t beat ’em, join ’em.” They both eventually got prices they were happy with even including cost of “purchasing the furniture.” A year ago I didn’t even know this was going on. But both of these situations popped up over the last 6-9 months and I got the impression after talking to these folks that this is pretty widespread (it’s probably taken a while to catch on). One hitch is that most sellers don’t want anything in writing and they’ll *try* to get the money for the furniture before the deal closes. But most buyers won’t do this – for obvious reasons – so it becomes an issue of honor among thieves. Both of the folks I know just stroked out the check right after closing and it wasn’t a big deal. I think at the end of the day most folks just think (understandably, frankly), “Fuck the lenders.”

Look, the folks who want lower comps shouldn’t have any problem with this type of behavior. These transactions keep part of the real purchase price off the books and thus depress the comps, all else being equal. So these folks should stop their whining and learn to love it.

[davelj]

[quote=urbanrealtor][quote=sdrealtor]Good advice[/quote]
Dave, let me ask, what are the versions of this that you have seen?[/quote]

I’ve seen this twice. Both times very similar stories. The prospective buyers had lost a couple of short-sale “auctions” to folks who were “buying the furniture” and they just threw in the towel and decided, “If we can’t beat ’em, join ’em.” They both eventually got prices they were happy with even including cost of “purchasing the furniture.” A year ago I didn’t even know this was going on. But both of these situations popped up over the last 6-9 months and I got the impression after talking to these folks that this is pretty widespread (it’s probably taken a while to catch on). One hitch is that most sellers don’t want anything in writing and they’ll *try* to get the money for the furniture before the deal closes. But most buyers won’t do this – for obvious reasons – so it becomes an issue of honor among thieves. Both of the folks I know just stroked out the check right after closing and it wasn’t a big deal. I think at the end of the day most folks just think (understandably, frankly), “Fuck the lenders.”

Look, the folks who want lower comps shouldn’t have any problem with this type of behavior. These transactions keep part of the real purchase price off the books and thus depress the comps, all else being equal. So these folks should stop their whining and learn to love it.

[davelj]

[quote=urbanrealtor][quote=sdrealtor]Good advice[/quote]
Dave, let me ask, what are the versions of this that you have seen?[/quote]

I’ve seen this twice. Both times very similar stories. The prospective buyers had lost a couple of short-sale “auctions” to folks who were “buying the furniture” and they just threw in the towel and decided, “If we can’t beat ’em, join ’em.” They both eventually got prices they were happy with even including cost of “purchasing the furniture.” A year ago I didn’t even know this was going on. But both of these situations popped up over the last 6-9 months and I got the impression after talking to these folks that this is pretty widespread (it’s probably taken a while to catch on). One hitch is that most sellers don’t want anything in writing and they’ll *try* to get the money for the furniture before the deal closes. But most buyers won’t do this – for obvious reasons – so it becomes an issue of honor among thieves. Both of the folks I know just stroked out the check right after closing and it wasn’t a big deal. I think at the end of the day most folks just think (understandably, frankly), “Fuck the lenders.”

Look, the folks who want lower comps shouldn’t have any problem with this type of behavior. These transactions keep part of the real purchase price off the books and thus depress the comps, all else being equal. So these folks should stop their whining and learn to love it.

[Anonymous]

The listing agent we were dealing with wasn’t the sharpest tool in the shed (but the agent was a tool). The furniture sale (i.e. bribe) was formally documented in the form of a Personal Property Agreement (PPA) that was to occur outside of escrow. The PPA referenced the Residential Purchase Agreement (RPA), but the RPA did not reference the PPA. Since the banks only see the RPA, they would be kept out of the loop.

Jim the Realtor used to talk about this kind of stuff all the time in his youtube videos – and call out the bad guys by name. I commend him for that. No one else seems to care or wants to do anything about it.

[Anonymous]

The listing agent we were dealing with wasn’t the sharpest tool in the shed (but the agent was a tool). The furniture sale (i.e. bribe) was formally documented in the form of a Personal Property Agreement (PPA) that was to occur outside of escrow. The PPA referenced the Residential Purchase Agreement (RPA), but the RPA did not reference the PPA. Since the banks only see the RPA, they would be kept out of the loop.

Jim the Realtor used to talk about this kind of stuff all the time in his youtube videos – and call out the bad guys by name. I commend him for that. No one else seems to care or wants to do anything about it.

[Anonymous]

The listing agent we were dealing with wasn’t the sharpest tool in the shed (but the agent was a tool). The furniture sale (i.e. bribe) was formally documented in the form of a Personal Property Agreement (PPA) that was to occur outside of escrow. The PPA referenced the Residential Purchase Agreement (RPA), but the RPA did not reference the PPA. Since the banks only see the RPA, they would be kept out of the loop.

Jim the Realtor used to talk about this kind of stuff all the time in his youtube videos – and call out the bad guys by name. I commend him for that. No one else seems to care or wants to do anything about it.

[Anonymous]

The listing agent we were dealing with wasn’t the sharpest tool in the shed (but the agent was a tool). The furniture sale (i.e. bribe) was formally documented in the form of a Personal Property Agreement (PPA) that was to occur outside of escrow. The PPA referenced the Residential Purchase Agreement (RPA), but the RPA did not reference the PPA. Since the banks only see the RPA, they would be kept out of the loop.

Jim the Realtor used to talk about this kind of stuff all the time in his youtube videos – and call out the bad guys by name. I commend him for that. No one else seems to care or wants to do anything about it.

[Anonymous]

The listing agent we were dealing with wasn’t the sharpest tool in the shed (but the agent was a tool). The furniture sale (i.e. bribe) was formally documented in the form of a Personal Property Agreement (PPA) that was to occur outside of escrow. The PPA referenced the Residential Purchase Agreement (RPA), but the RPA did not reference the PPA. Since the banks only see the RPA, they would be kept out of the loop.

Jim the Realtor used to talk about this kind of stuff all the time in his youtube videos – and call out the bad guys by name. I commend him for that. No one else seems to care or wants to do anything about it.

[faterikcartman]

Wish I had seen this a few weeks ago.

My wife and I had already experienced short sale chicanery when we couldn’t figure out why a listing agent was not even interested in our offer.

We recently made an offer on land and our agent was asked if we could bring cash to the deal to cover past due HOA and other fees. We weren’t sure how to handle this and our agent replied “my clients have cash, but it depends on what the final number is”.

If I had read this I would have savvied to what was going on and just offered up cash on the side and made a lower offer. Luckily for us expensive lots are a tougher sell than cheap houses so our offer went to the bank anyway — though I am still expecting some sort of cash outlay needing to be made to get closing done. But really I’m not sure what is going to happen and am just waiting to see.

On a personal note, I have been burned too many times by people not wanting to put things in writing and later denying they said something so for several years now if someone I’m dealing with (all transactions, not just real estate) goes out of their way to avoid putting it in writing I won’t deal with them anymore. For example, I’ll try to email my questions and instead of getting answers in writing I get a response like “why don’t you give me a call…” Just a huge red flag for me anymore.

[faterikcartman]

Wish I had seen this a few weeks ago.

My wife and I had already experienced short sale chicanery when we couldn’t figure out why a listing agent was not even interested in our offer.

We recently made an offer on land and our agent was asked if we could bring cash to the deal to cover past due HOA and other fees. We weren’t sure how to handle this and our agent replied “my clients have cash, but it depends on what the final number is”.

If I had read this I would have savvied to what was going on and just offered up cash on the side and made a lower offer. Luckily for us expensive lots are a tougher sell than cheap houses so our offer went to the bank anyway — though I am still expecting some sort of cash outlay needing to be made to get closing done. But really I’m not sure what is going to happen and am just waiting to see.

On a personal note, I have been burned too many times by people not wanting to put things in writing and later denying they said something so for several years now if someone I’m dealing with (all transactions, not just real estate) goes out of their way to avoid putting it in writing I won’t deal with them anymore. For example, I’ll try to email my questions and instead of getting answers in writing I get a response like “why don’t you give me a call…” Just a huge red flag for me anymore.

[faterikcartman]

Wish I had seen this a few weeks ago.

My wife and I had already experienced short sale chicanery when we couldn’t figure out why a listing agent was not even interested in our offer.

We recently made an offer on land and our agent was asked if we could bring cash to the deal to cover past due HOA and other fees. We weren’t sure how to handle this and our agent replied “my clients have cash, but it depends on what the final number is”.

If I had read this I would have savvied to what was going on and just offered up cash on the side and made a lower offer. Luckily for us expensive lots are a tougher sell than cheap houses so our offer went to the bank anyway — though I am still expecting some sort of cash outlay needing to be made to get closing done. But really I’m not sure what is going to happen and am just waiting to see.

On a personal note, I have been burned too many times by people not wanting to put things in writing and later denying they said something so for several years now if someone I’m dealing with (all transactions, not just real estate) goes out of their way to avoid putting it in writing I won’t deal with them anymore. For example, I’ll try to email my questions and instead of getting answers in writing I get a response like “why don’t you give me a call…” Just a huge red flag for me anymore.

[faterikcartman]

Wish I had seen this a few weeks ago.

My wife and I had already experienced short sale chicanery when we couldn’t figure out why a listing agent was not even interested in our offer.

We recently made an offer on land and our agent was asked if we could bring cash to the deal to cover past due HOA and other fees. We weren’t sure how to handle this and our agent replied “my clients have cash, but it depends on what the final number is”.

If I had read this I would have savvied to what was going on and just offered up cash on the side and made a lower offer. Luckily for us expensive lots are a tougher sell than cheap houses so our offer went to the bank anyway — though I am still expecting some sort of cash outlay needing to be made to get closing done. But really I’m not sure what is going to happen and am just waiting to see.

On a personal note, I have been burned too many times by people not wanting to put things in writing and later denying they said something so for several years now if someone I’m dealing with (all transactions, not just real estate) goes out of their way to avoid putting it in writing I won’t deal with them anymore. For example, I’ll try to email my questions and instead of getting answers in writing I get a response like “why don’t you give me a call…” Just a huge red flag for me anymore.

[Author]

Posts