Market Wise Q&A: If It Looks Like Fraud....
Pat Kapowich for the San Jose Mercury News Q: After missing out through several multiple-offer competitions, my husband responded to an ad for a house on Craigslist. The odd thing was that we had recently noticed this house go on and off the market within one day. Even though the ad stated it is a “short sale fixer-upper” and “needs “TLC,” the list price was low for that neighborhood. As a point of fact, the home was listed as a Pending Sale on the Multiple Listing Service, (MLS).
To our surprise, the home is nearly in move-in condition and easily tens of thousands of dollars under-priced. The seller’s agent said Pending Sale was not an issue and he could represent us as buyers provided we issue an offer that day. So we made an offer on the spot through the seller’s agent. That night the sellers signed our offer and the agent said he “only shipped off our offer to the bank for approval of the short-sale.”
The following week the agent said we would have to pay a third party to negotiate and formalize the short sale with the seller’s bank. He also mentioned not to discuss it to our loan broker or escrow officer as it might “muddy the waters.” Originally, he said the fee would be $3,000 and three weeks later it was another $2,500 for a total of $5,500. My husband got a little upset until the agent reminded us the house was $40,000 under value.
My father got involved and researched county records for this “third party negotiator” firm, which is owned by the listing agent and his brother. My father is certain we are unassuming co-conspirators in fraudulent activities. How do other buyers deal with a sale that actually is too good to be true?
A: You can remain quiet and close the sale. Sure, the FBI might not learn of your culpability in the defrauding an FDIC insured institution. The MLS and its members will never know the Pending Sale was a ploy. And the Department of Real Estate, (DRE), will continue to think your agent is a solid member of society. Plus, the local, state and national association of REALTORS can assume his required ethics training is genuinely in play. Of course, this will allow the brothers to proceed to stealthily ply their trade at everyone’s unknowing expense. Conversely, other buyers in this type of dilemma will engage a real estate attorney who can unwind the sale, retrieve your earnest money deposit and report the agent to all the proper agencies
Realtor Pat Kapowich, Kapowich Real Estate, is a Certified Real Estate Broker. Contact him at (408) 245-7700 or SiliconValleyBroker@gmail.com
Realtor Pat Kapowich. Broker/Owner Certified Real Estate Broker (CRB) ABR, CRS, GRI & SRES Home Sales Expertise and Experience (408) 245-7700