Spent some time on the phone today with this company. I've heard of companies like this before. They claim to have investor backing to purchase short sales. They want to be the negotiators on the transaction and claim to offer 7% commission.
Too good to be true right? That's what I'm thinking. Sounds to me like they are looking for rights to advertise the property, then if they find a buyer they purchase the property and take the spread. Smells like a potential lawsuit to me, but they claim everything is fully disclosed.
Feel free to watch their presentation below and leave feedback and opinions. Thanks!
Admin. Edit - LINK DELETED ***Would not give them a back link!
Most of the time folks like this want you to be their pawn in their flopping scheme. Extremely common practice, and this has been done for many years by the "sleezier" side of the industry. They are smart enough to cover their own bottoms where they will not get in trouble for it,
you on the other hand...
It has become more and more difficult for them to do this in the last year or so with the advancement of Arms Length Affidavits and other lender approval regulations. I'm honestly amazed there are still short sale agents out there who haven't been exposed to this. You must be late getting in the short sale biz or in an area where there are not that many of them.
Oh, I've been exposed to it. I just wanted to see if any agents had found that there is now a legal way to do this successfully. In 2008, I was part of a short sale business model similar to this. We kept everything fully disclosed, but once we saw how the industry (banks & government) were focusing on eliminating this kind of transaction, we got out of it.
I was just curious if anyone had recently successfully completed these, or if any new laws/exceptions had been passed to make this feasible and acceptable.
Well, I believe if they are done right then there is nothing wrong with it. Freddie Mac, however, feels differently. I know of several investors who are being pounded by Freddie Mac right now over it (regardless of the fact that it clearly states the intention to sell for a profit multiple times throughout the document, the HUD was approved TWICE and funds accepted and NOW Freddie comes back crying foul).
Since you are convincing a bank that the contract you have on the short sale is the best offer you can get, knowing full well the property is worth more. The homeowner loses, the bank loses, and the tax payers bailing out the banks lose. Now do you see the scam?
Within the investor contract, it clearly states that they have every intention to resell the property for a profit. That is not "convincing" the bank of anything. If the lender does their due diligence and they accept the investor's contract...and the homeowner gets off with no deficiency...what's the problem?
And, please don't say the taxpayers get hurt. LOL The lenders have been getting bailed out for all of their stupid decisions...in fact, a recent look at the Fed's book revealed that the banks have been quietly been getting bailed out for ages!
We do not negotiate A-B-C deals, but if the lenders accept the deal...then that was the lender's choice. They have every right to counter offer, and if they felt that they could get a better contract, then they would counter offer.
Check out the last post. Same guy I will bet. Myrick
That's exactly what I thought...someone who registered today and commented on this post bolding the company name. LOL
If you join in with them on short sale transactions, you will be a party to "flopping". It has been going on down here in SWFL for a long time and it is just now beginning to bubble to the surface. Attorneys hold seminars for listing agents to get them to turn over their listings. They have an "investor" put the offer in and they negotiate the short sale. You get both sides of the first deal, and then they re-list it with you so you can get at least another side of the deal. Everyone including the homeowner loses and you may also have an ethics complaint against your license. If you are willing to risk your license, go ahead and use them. Otherwise, run for the hills.
Thats the game most play. Sad that so many agents still fall for this stuff and get in the middle of these deals. Agents who are gullible enough to fall into this should NOT be practicing real estate.
It's probably also one of those deals where you pay money for stuff, if things go wrong, they walk away leaving you holding the bag and they don't care because you are the one with the fiduciary (legal) duty to the seller and will just make you look bad in the end.