Real Estate Red Flags You Would Like To Know

January 16, 2013 at 11:45 am 1 comment

by: Maria Hass –

A home in my neighborhood recently closed for a significantly lower price than I thought it could sell for.

It took around eight months to get the short sale closed. And the train of events that occurred from the time it was listed to the time it took to close appeared funny. Virtual red flags were waving in my head as I saw the house listed for a very low price.

Only six minutes after the home was listed, the status was changed from “Active” to “Active with Contingency” – meaning the seller had accepted an offer. An hour and a half later, the buyer’s agent compensation was changed from 2.5% to 1.5% which is unusual in any transaction.

My initial thought was, this deal was “made in heaven” prior to the listing, between the seller’s agent and the buyer’s agent who works with a fix-and-flip investor client. I dug deeper into the case and found out that the buyers who bought the property are investors buying bulk properties to fix and flip or rent out.

This reminds me of a time when a Realtor called me asking for my future short sale listings. He worked for an investment group. His offer was to give his commission to me as long as his offer was accepted. Investor offers are relatively low.

It makes me wonder about the moral implications of such transactions and whether such arrangements are in violation of any real estate contract and Arms Length requirements set by the seller’s lender.

I took the matter to my broker, asking if such an arrangement in violation of the following:

1. Realtor Code of Ethics

2. Real Estate Contract between Seller and Realtor

3. Arms Length Requirement of the Seller’s Lender

In speaking with my broker, she said that with convincing proof, this transaction may qualify as a real estate fraud or scheme. It is fraudulent if the listing agent withheld any information from the seller or seller’s lender that is material to the sale of the home. This would include other offers, buyer’s intent to quickly resell the home and more.

If you suspect a fraud or real estate scheme has been committed in regards to a particular transaction, go to this website for information and to provide information to state regulators:

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate, Real Estate Deals. Tags: , , , .

President Signs New 2013 Real Estate Laws WHEN IS IT A GOOD TIME TO SELL OR BUY?

1 Comment Add your own

  • 1. Kathrin  |  June 5, 2013 at 9:13 pm

    Greetings from California! I’m bored at work so I decided to check out your website on my iphone during lunch break. I really like the info you provide here and can’t wait to take a look when I get home.
    I’m surprised at how quick your blog loaded on my cell phone .. I’m not even using WIFI,
    just 3G .. Anyhow, fantastic blog!


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