Red Flags on Purchase Offers for Sacramento Homes

broke-no-preapproval-letter-buyerEvery Sacramento listing agent owes a fiduciary to her sellers to try to ensure that the offer the seller has received is a bonafide offer, especially those that seem a little bit weird. I’m not about to say that all out-of-area buyers, especially those from the Bay area, are crooks or are not to be trusted, but I have seen my fair share of purchase offers that require additional scrutiny and most of them seem to stem from the Bay area. To be fair, though, there are crooks right here in Sacramento, and there are doofus real estate agents right here in town who enable them.

Part of my job to my sellers is to look for what can go wrong and advise accordingly. The first red flag I might see in an offer is due to the fact the agent might not read the MLS listing nor adhere to the requirements. I suspect they do not always read all of the instructions because they either don’t have full access to MLS, they are confused, inexperienced, or they just didn’t bother to look for attachments. Some agents probably do not want to comply, so they simply ignore the requirements.

The second red flag is the offer itself might appear as a template. This means all of the standard information is typed in a different font, often an odd color, and a different point size, and the pertinent data such as property address and sales price do not match. Agents use this procedure when they are creating multiple offers and throwing those offers to the wind. They think nobody notices this.

The third red flag is the offer might be missing information. Certain boxes might be left unchecked and blank lines will be incomplete. Attention to detail is not always a strong suit among thieves, perhaps the APN number is missing or the agent’s license number is not there, which are important items to include.

The supporting documents are often a mishmash of papers tossed together. The proof of funds might not contain the buyer’s name. The earnest money deposit might be from a new stack of checks, numbered in the low 100s and containing no date nor identifying information. The pre-approval letter is most likely outdated if not expired.

You might ask yourself why do they bother to do this? What is the point? The point is the investors think they are clever and smart to lock down as many properties as they possibly can while they figure out which ones they might want to buy. They might make offers on 10 or 20 listings but be able to buy only one. This practice is not advised and many lawyers say it is against the law, but when has that stopped the crooks?

When you look at all of this damaging evidence, coupled with the fact the agent has not shown the home to the buyer, these are not really offers. If you need further proof, just ask the agent a question such as did you show the home? The agent won’t reply. And there you go.

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