Short Sale Realtor in collusion with buyer, is it legal.

[SD Realtor]

Dooh what you are thinking is simply making an unsolicited offer.

Everyday lots and lots of sharks pour over the public recordings to find new homeowners who are in default. They then approach these homeowners with plenty of exotic schemes from loan mods or workouts, to representation in one form or another to sell the home, as well as having investors ready for ABC transactions. An ABC transaction is pretty much a middle deal. An investor will buy a short sale while at the same time flipping it. So a distressed homeowner has a 700k loan and has to sell the home short. He short sells it but to some investor who will pay 500k for it and then at the same time keeps it active on the MLS and collects other offers for say 550k. The bank approves the 500k deal, that closes and at the same time the investor sells it for another 50k gain.

There are the common double ended deals as well which are simply cases of agents being greedy and shielding or holding back offers.

It all kind of sucks. There is nothing preventing you from trying to find someone in distress and work out a deal with them. It is simply alot of time and effort and much harder and time consuming then it sound. Similarly, as I have mentioned before, going out and getting a hard money lender or raising cash somehow and buying a home at trustee sale is another unconventional way to beat the game.

**********

As we have discussed over and over the problem is the process. Regardless of whether it is a short sale or an reo, the dual agency problem is always going to be there. In short sales some of this ABC crap is also present. It would be nice is there were some simple parameters added to the process. Simplistic ideas such as minimum advertising durations of say x number of days before an offer could be accepted in the case of an REO would be nice. Also in the case of multiple offers, the (pick a number) say 3 highest and best offers could all be submitted to the Asset manager with the realtors recommendation for which one to accept.

For short sales things get a bit more blurry because the damned processing time of the lender makes it harder. However something like the above suggestion for reos would go a long long way towards helping things out. Simply outlawing dual agency would not hurt either. Buyers may whine that they would rather keep the commission then have some agent they didn’t want representing them but there can be ways to work that out.

The MLS is simply an advertising tool. Realtors in fact are not required to use it and they can get a waiver signed by homeowners who do not want the home on the MLS and submit that waiver and the listing doesn’t have to go on the MLS. Saying the MLS is the problem is an ignorant statement.

The problem is that there are fundamental problems in the way short sales and reos MAY be handled. There are enough potential problems there that these types of sales need to have increased transparency and/or regulatory control. It doesn’t take a rocket scientist or a bitter sadsack to see that.

[davelj]

[quote=urbanrealtor]

Its the bank’s responsibility to make sure they are not getting screwed.

But good luck getting them to be as diligent as they should.[/quote]

Exactly. Some appraiser provided the lender with a broker price opinion and I’m betting that the buyer in this case at least hit that BPO. Now, the appraisal might be screwed – this happens a lot these days – but it’s the lender’s job to make sure that doesn’t happen. Once someone hits the BPO… the lender will often just take that offer and punch the ticket even though patience would have yielded 10% more.

[quote=Doooh]
Tell me this, isn’t the most prudent thing to do, in this housing environmental we find ourselves in, is to find my own underwater seller who hasn’t listed his delinquent mortgage/home, and convince him to sell to me?[/quote]

Yes. I just did this with a condo – a girl I know sold it to me in a short sale. It never hit the MLS. For reasons I won’t go into, I knew the appraisal was going to be way off as a result of appraiser laziness, so I just hit the BPO with an all-cash offer and the lender accepted it almost immediately.

[davelj]

[quote=urbanrealtor]

Its the bank’s responsibility to make sure they are not getting screwed.

But good luck getting them to be as diligent as they should.[/quote]

Exactly. Some appraiser provided the lender with a broker price opinion and I’m betting that the buyer in this case at least hit that BPO. Now, the appraisal might be screwed – this happens a lot these days – but it’s the lender’s job to make sure that doesn’t happen. Once someone hits the BPO… the lender will often just take that offer and punch the ticket even though patience would have yielded 10% more.

[quote=Doooh]
Tell me this, isn’t the most prudent thing to do, in this housing environmental we find ourselves in, is to find my own underwater seller who hasn’t listed his delinquent mortgage/home, and convince him to sell to me?[/quote]

Yes. I just did this with a condo – a girl I know sold it to me in a short sale. It never hit the MLS. For reasons I won’t go into, I knew the appraisal was going to be way off as a result of appraiser laziness, so I just hit the BPO with an all-cash offer and the lender accepted it almost immediately.

[davelj]

[quote=urbanrealtor]

Its the bank’s responsibility to make sure they are not getting screwed.

But good luck getting them to be as diligent as they should.[/quote]

Exactly. Some appraiser provided the lender with a broker price opinion and I’m betting that the buyer in this case at least hit that BPO. Now, the appraisal might be screwed – this happens a lot these days – but it’s the lender’s job to make sure that doesn’t happen. Once someone hits the BPO… the lender will often just take that offer and punch the ticket even though patience would have yielded 10% more.

[quote=Doooh]
Tell me this, isn’t the most prudent thing to do, in this housing environmental we find ourselves in, is to find my own underwater seller who hasn’t listed his delinquent mortgage/home, and convince him to sell to me?[/quote]

Yes. I just did this with a condo – a girl I know sold it to me in a short sale. It never hit the MLS. For reasons I won’t go into, I knew the appraisal was going to be way off as a result of appraiser laziness, so I just hit the BPO with an all-cash offer and the lender accepted it almost immediately.

[davelj]

[quote=urbanrealtor]

Its the bank’s responsibility to make sure they are not getting screwed.

But good luck getting them to be as diligent as they should.[/quote]

Exactly. Some appraiser provided the lender with a broker price opinion and I’m betting that the buyer in this case at least hit that BPO. Now, the appraisal might be screwed – this happens a lot these days – but it’s the lender’s job to make sure that doesn’t happen. Once someone hits the BPO… the lender will often just take that offer and punch the ticket even though patience would have yielded 10% more.

[quote=Doooh]
Tell me this, isn’t the most prudent thing to do, in this housing environmental we find ourselves in, is to find my own underwater seller who hasn’t listed his delinquent mortgage/home, and convince him to sell to me?[/quote]

Yes. I just did this with a condo – a girl I know sold it to me in a short sale. It never hit the MLS. For reasons I won’t go into, I knew the appraisal was going to be way off as a result of appraiser laziness, so I just hit the BPO with an all-cash offer and the lender accepted it almost immediately.

[davelj]

[quote=urbanrealtor]

Its the bank’s responsibility to make sure they are not getting screwed.

But good luck getting them to be as diligent as they should.[/quote]

Exactly. Some appraiser provided the lender with a broker price opinion and I’m betting that the buyer in this case at least hit that BPO. Now, the appraisal might be screwed – this happens a lot these days – but it’s the lender’s job to make sure that doesn’t happen. Once someone hits the BPO… the lender will often just take that offer and punch the ticket even though patience would have yielded 10% more.

[quote=Doooh]
Tell me this, isn’t the most prudent thing to do, in this housing environmental we find ourselves in, is to find my own underwater seller who hasn’t listed his delinquent mortgage/home, and convince him to sell to me?[/quote]

Yes. I just did this with a condo – a girl I know sold it to me in a short sale. It never hit the MLS. For reasons I won’t go into, I knew the appraisal was going to be way off as a result of appraiser laziness, so I just hit the BPO with an all-cash offer and the lender accepted it almost immediately.

[davelj]

[quote=Doooh]So is it illegal as I described the situation?

I’m ready to go to war over this, these are my tax dollars bailing out Bank of America, and this realtor is purposely digging the bank deeper into a hole by not accepting legit cash offers on the next business day after listing the property.[/quote]

This is just a nitpick. BofA paid back its TARP plus dividends (and warrant profits). Whether it (or any of the other banks) should have received TARP at all is another issue entirely. I despise BofA, but they’ve paid us back. That’s just a fact. And, in fact, I believe that the bank-specific TARP money has almost all been paid back at this point in an aggregate sense. That is, the losses have been more than offset by the dividends and warrant profits. There are still a few hundred banks with TARP but they are all so small that the aggregate number is a few billion dollars. You could write them down to zero and the banks will still show a net profit to the Treasury on TARP. Again, to be clear, I’m not saying that TARP was a good idea, merely pointing out that the banks will repay us on an aggregate basis (which is a slightly better outcome than I expected).

Now… where you can bitch and moan more legitimately is with respect to Fannie/Freddie. Because we’re bailing out those guys to the tune of hundreds of billions. And that’s real and in the here and now. Now, as I’ve explained many times, we’ll get our nominal dollars paid back from Fannie/Freddie… but it will be quite some time in the future – probably a decade.

Again, just a nitpick.

[davelj]

[quote=Doooh]So is it illegal as I described the situation?

I’m ready to go to war over this, these are my tax dollars bailing out Bank of America, and this realtor is purposely digging the bank deeper into a hole by not accepting legit cash offers on the next business day after listing the property.[/quote]

This is just a nitpick. BofA paid back its TARP plus dividends (and warrant profits). Whether it (or any of the other banks) should have received TARP at all is another issue entirely. I despise BofA, but they’ve paid us back. That’s just a fact. And, in fact, I believe that the bank-specific TARP money has almost all been paid back at this point in an aggregate sense. That is, the losses have been more than offset by the dividends and warrant profits. There are still a few hundred banks with TARP but they are all so small that the aggregate number is a few billion dollars. You could write them down to zero and the banks will still show a net profit to the Treasury on TARP. Again, to be clear, I’m not saying that TARP was a good idea, merely pointing out that the banks will repay us on an aggregate basis (which is a slightly better outcome than I expected).

Now… where you can bitch and moan more legitimately is with respect to Fannie/Freddie. Because we’re bailing out those guys to the tune of hundreds of billions. And that’s real and in the here and now. Now, as I’ve explained many times, we’ll get our nominal dollars paid back from Fannie/Freddie… but it will be quite some time in the future – probably a decade.

Again, just a nitpick.

[davelj]

[quote=Doooh]So is it illegal as I described the situation?

I’m ready to go to war over this, these are my tax dollars bailing out Bank of America, and this realtor is purposely digging the bank deeper into a hole by not accepting legit cash offers on the next business day after listing the property.[/quote]

This is just a nitpick. BofA paid back its TARP plus dividends (and warrant profits). Whether it (or any of the other banks) should have received TARP at all is another issue entirely. I despise BofA, but they’ve paid us back. That’s just a fact. And, in fact, I believe that the bank-specific TARP money has almost all been paid back at this point in an aggregate sense. That is, the losses have been more than offset by the dividends and warrant profits. There are still a few hundred banks with TARP but they are all so small that the aggregate number is a few billion dollars. You could write them down to zero and the banks will still show a net profit to the Treasury on TARP. Again, to be clear, I’m not saying that TARP was a good idea, merely pointing out that the banks will repay us on an aggregate basis (which is a slightly better outcome than I expected).

Now… where you can bitch and moan more legitimately is with respect to Fannie/Freddie. Because we’re bailing out those guys to the tune of hundreds of billions. And that’s real and in the here and now. Now, as I’ve explained many times, we’ll get our nominal dollars paid back from Fannie/Freddie… but it will be quite some time in the future – probably a decade.

Again, just a nitpick.

[davelj]

[quote=Doooh]So is it illegal as I described the situation?

I’m ready to go to war over this, these are my tax dollars bailing out Bank of America, and this realtor is purposely digging the bank deeper into a hole by not accepting legit cash offers on the next business day after listing the property.[/quote]

This is just a nitpick. BofA paid back its TARP plus dividends (and warrant profits). Whether it (or any of the other banks) should have received TARP at all is another issue entirely. I despise BofA, but they’ve paid us back. That’s just a fact. And, in fact, I believe that the bank-specific TARP money has almost all been paid back at this point in an aggregate sense. That is, the losses have been more than offset by the dividends and warrant profits. There are still a few hundred banks with TARP but they are all so small that the aggregate number is a few billion dollars. You could write them down to zero and the banks will still show a net profit to the Treasury on TARP. Again, to be clear, I’m not saying that TARP was a good idea, merely pointing out that the banks will repay us on an aggregate basis (which is a slightly better outcome than I expected).

Now… where you can bitch and moan more legitimately is with respect to Fannie/Freddie. Because we’re bailing out those guys to the tune of hundreds of billions. And that’s real and in the here and now. Now, as I’ve explained many times, we’ll get our nominal dollars paid back from Fannie/Freddie… but it will be quite some time in the future – probably a decade.

Again, just a nitpick.

[davelj]

[quote=Doooh]So is it illegal as I described the situation?

I’m ready to go to war over this, these are my tax dollars bailing out Bank of America, and this realtor is purposely digging the bank deeper into a hole by not accepting legit cash offers on the next business day after listing the property.[/quote]

This is just a nitpick. BofA paid back its TARP plus dividends (and warrant profits). Whether it (or any of the other banks) should have received TARP at all is another issue entirely. I despise BofA, but they’ve paid us back. That’s just a fact. And, in fact, I believe that the bank-specific TARP money has almost all been paid back at this point in an aggregate sense. That is, the losses have been more than offset by the dividends and warrant profits. There are still a few hundred banks with TARP but they are all so small that the aggregate number is a few billion dollars. You could write them down to zero and the banks will still show a net profit to the Treasury on TARP. Again, to be clear, I’m not saying that TARP was a good idea, merely pointing out that the banks will repay us on an aggregate basis (which is a slightly better outcome than I expected).

Now… where you can bitch and moan more legitimately is with respect to Fannie/Freddie. Because we’re bailing out those guys to the tune of hundreds of billions. And that’s real and in the here and now. Now, as I’ve explained many times, we’ll get our nominal dollars paid back from Fannie/Freddie… but it will be quite some time in the future – probably a decade.

Again, just a nitpick.

[urbanrealtor]

[quote=SD Realtor]
There are the common double ended deals as well which are simply cases of agents being greedy and shielding or holding back offers.

It all kind of sucks. There is nothing preventing you from trying to find someone in distress and work out a deal with them. It is simply alot of time and effort and much harder and time consuming then it sound.

….

As we have discussed over and over the problem is the process. Regardless of whether it is a short sale or an reo, the dual agency problem is always going to be there.

…
It would be nice is there were some simple parameters added to the process. Simplistic ideas such as minimum advertising durations of say x number of days before an offer could be accepted in the case of an REO would be nice. Also in the case of multiple offers, the (pick a number) say 3 highest and best offers could all be submitted to the Asset manager with the realtors recommendation for which one to accept.

For short sales things get a bit more blurry because the damned processing time of the lender makes it harder. However something like the above suggestion for reos would go a long long way towards helping things out. Simply outlawing dual agency would not hurt either. Buyers may whine that they would rather keep the commission then have some agent they didn’t want representing them but there can be ways to work that out.

The MLS is simply an advertising tool. Realtors in fact are not required to use it and they can get a waiver signed by homeowners who do not want the home on the MLS and submit that waiver and the listing doesn’t have to go on the MLS. Saying the MLS is the problem is an ignorant statement.

The problem is that there are fundamental problems in the way short sales and reos MAY be handled. There are enough potential problems there that these types of sales need to have increased transparency and/or regulatory control.

…
[/quote]

Well put.
Amen brother.

[urbanrealtor]

[quote=SD Realtor]
There are the common double ended deals as well which are simply cases of agents being greedy and shielding or holding back offers.

It all kind of sucks. There is nothing preventing you from trying to find someone in distress and work out a deal with them. It is simply alot of time and effort and much harder and time consuming then it sound.

….

As we have discussed over and over the problem is the process. Regardless of whether it is a short sale or an reo, the dual agency problem is always going to be there.

…
It would be nice is there were some simple parameters added to the process. Simplistic ideas such as minimum advertising durations of say x number of days before an offer could be accepted in the case of an REO would be nice. Also in the case of multiple offers, the (pick a number) say 3 highest and best offers could all be submitted to the Asset manager with the realtors recommendation for which one to accept.

For short sales things get a bit more blurry because the damned processing time of the lender makes it harder. However something like the above suggestion for reos would go a long long way towards helping things out. Simply outlawing dual agency would not hurt either. Buyers may whine that they would rather keep the commission then have some agent they didn’t want representing them but there can be ways to work that out.

The MLS is simply an advertising tool. Realtors in fact are not required to use it and they can get a waiver signed by homeowners who do not want the home on the MLS and submit that waiver and the listing doesn’t have to go on the MLS. Saying the MLS is the problem is an ignorant statement.

The problem is that there are fundamental problems in the way short sales and reos MAY be handled. There are enough potential problems there that these types of sales need to have increased transparency and/or regulatory control.

…
[/quote]

Well put.
Amen brother.

[urbanrealtor]

[quote=SD Realtor]
There are the common double ended deals as well which are simply cases of agents being greedy and shielding or holding back offers.

It all kind of sucks. There is nothing preventing you from trying to find someone in distress and work out a deal with them. It is simply alot of time and effort and much harder and time consuming then it sound.

….

As we have discussed over and over the problem is the process. Regardless of whether it is a short sale or an reo, the dual agency problem is always going to be there.

…
It would be nice is there were some simple parameters added to the process. Simplistic ideas such as minimum advertising durations of say x number of days before an offer could be accepted in the case of an REO would be nice. Also in the case of multiple offers, the (pick a number) say 3 highest and best offers could all be submitted to the Asset manager with the realtors recommendation for which one to accept.

For short sales things get a bit more blurry because the damned processing time of the lender makes it harder. However something like the above suggestion for reos would go a long long way towards helping things out. Simply outlawing dual agency would not hurt either. Buyers may whine that they would rather keep the commission then have some agent they didn’t want representing them but there can be ways to work that out.

The MLS is simply an advertising tool. Realtors in fact are not required to use it and they can get a waiver signed by homeowners who do not want the home on the MLS and submit that waiver and the listing doesn’t have to go on the MLS. Saying the MLS is the problem is an ignorant statement.

The problem is that there are fundamental problems in the way short sales and reos MAY be handled. There are enough potential problems there that these types of sales need to have increased transparency and/or regulatory control.

…
[/quote]

Well put.
Amen brother.

[urbanrealtor]

[quote=SD Realtor]
There are the common double ended deals as well which are simply cases of agents being greedy and shielding or holding back offers.

It all kind of sucks. There is nothing preventing you from trying to find someone in distress and work out a deal with them. It is simply alot of time and effort and much harder and time consuming then it sound.

….

As we have discussed over and over the problem is the process. Regardless of whether it is a short sale or an reo, the dual agency problem is always going to be there.

…
It would be nice is there were some simple parameters added to the process. Simplistic ideas such as minimum advertising durations of say x number of days before an offer could be accepted in the case of an REO would be nice. Also in the case of multiple offers, the (pick a number) say 3 highest and best offers could all be submitted to the Asset manager with the realtors recommendation for which one to accept.

For short sales things get a bit more blurry because the damned processing time of the lender makes it harder. However something like the above suggestion for reos would go a long long way towards helping things out. Simply outlawing dual agency would not hurt either. Buyers may whine that they would rather keep the commission then have some agent they didn’t want representing them but there can be ways to work that out.

The MLS is simply an advertising tool. Realtors in fact are not required to use it and they can get a waiver signed by homeowners who do not want the home on the MLS and submit that waiver and the listing doesn’t have to go on the MLS. Saying the MLS is the problem is an ignorant statement.

The problem is that there are fundamental problems in the way short sales and reos MAY be handled. There are enough potential problems there that these types of sales need to have increased transparency and/or regulatory control.

…
[/quote]

Well put.
Amen brother.

[Author]

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