I had a very interesting phone conversation about a short sale property this morning. I want to be clear this is not my listing or my buyer for the property being referenced. The buyer did contact me and wanted to discuss the situation as they wanted an outside opinion. Please keep in mind this is NOT legal advise and to verify the accuracy of this if you should come across a similar scenario you should contact an attorney.
Here is the scenario: The buyer put an offer in on a short sale property last month. The buyer worked directly with the listing agent to put the offer together and has provided all of the necessary documentation.
The listing agent (now working as a transaction broker as best as I can see) submits the offer to the lender for short sale approval. The lender has approved the short sale. Yay! Right??? Well, not so much. The listing agent DID NOT submit the offer for short sale approval to any of the other lien-holders against the property nor did the agent disclose there were multiple liens against the property. Now the agent is telling the buyer it will be necessary for the buyer to PAY OFF all other existing encumbrances PRIOR TO THE CLOSING to make the deal happen. Whoa there, what? This is called FRAUD and it is a FELONY. It violates a number of RESPA rules and damages the senior lien holder. If a BUYER, SELLER, OR AGENT engage in this activity, it could land them in jail. For a real estate agent, it would be grounds for immediate revocation of his or her license and a significant fine.
Short sales are tricky. I get it. But, it isn't worth going to jail to get one done. If you are ever in a position where you are asked to do something that seems shady in a real estate transaction you should immediately contact an attorney and walk away from the deal.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment