buyers agent tips for short sale
As a Sacramento real estate agent — and just a long-term participant / observer in the world of life on earth — I tend to notice Sacramento short sale scams, and scams in general. My radar is always on the alert. It’s pretty difficult to bamboozle this agent. While other agents laugh and scoff when I ask what if, it generally turns out that I am correct in my initial assessments.
First, I listen to my gut instincts. You know, people don’t pay enough attention to their gut instincts, and they tend to mistrust that instinct because it’s not always based on logic. It’s telling you something for a reason, is what I find. If you feel uneasy or uncertain, listen to your instincts. There could be a sign you’re just not picking up with the side of your brain that processes that kind of information but it’s still sending a signal to you, regardless.
The scam I see run in Sacramento short sales over and over is that of secret collaboration between the listing agent and the sellers. There is some kind of confidential arrangement going on. Maybe a family member or a friend wants to buy the home as a short sale and then either later live in it, rent it out or flip it. The parties involved might not even see it as a scam, but that doesn’t make it any less fraudulent.
Sacramento short sale scams are almost always mortgage fraud because the parties involved don’t fully disclose to the lender and, if the lender knew, the lender would not have approved that short sale. But there are most likely other laws and, if the agent is a REALTOR, various Code of Ethics that could be violated.
I just spotted a suspicious short sale in MLS today, because a buyer in San Jose called about it. There are 3 homes in a row on the same street owned by people with the same last name, all in various stages of foreclosure, one purchased less than a year ago. But the short sale stands out like a sore thumb.
Here are the things I see that buyers and their buyer’s agents might want to question. They result in downplaying the home and telling a buyer’s agent not to bother to write an offer. Let me say that any one or two of these alone is not a reason for suspicion but when they mostly all apply to your transaction, you could be in trouble:
- One photo in MLS, with a car in the driveway
- More than 30 days on the market with no history of pending status in a hot neighborhood
- Brief and odd marketing comments such as: 4 bedroom home on a public street needs TLC. (What kind of agent writes like that?)
- Out-of-area real estate agent
- Out-of-area real estate company
- Agent shares same last name as the sellers (relatives cannot sell a short sale)
- Commission offered is less than what short sales pay (no reason for that)
- Showing instructions state: call listing agent (who probably does not call back)
Be careful out there. There are the crooks who know they are crooks, and then you’ve got the ones who don’t know which end is up yet are still crooks. You can’t tell the difference. But you can stay clear if you smell trouble.