WatchHi folks,
Some of you may have been following my real estate escapades here in the East Bay. Over the past 6-7 months, I've probably made 9 offers (6-7 of those were well above asking price) and have not been able to seal a property. I found out that at least one of those offers I was in fact the highest bidder but got beat out by someone who agreed to let the current owner remain in the house, an arrangement I would have agreed to but had no knowledge of.
Fast forward... I notice a house come out on MLS yesterday morning which is advertised as having open house on Thursday and Saturday this week. I make arrangements with my agent to view it. Two hours later my agent calls me and says it's pending and that the selling party must have had a buyer lined up all along.
From my understanding, with any short sale the bank will lay out "approved" price that must be met before the bank agrees to sell. But the short sale agent is in complete control of what offers they present to the bank. What a lovely arrangement for fraud! The buyer may bring someone to the table (a sister with a different last name for instance) or the short sale agent can "double dip" by bringing a buyer they represent where in effect they then represent the buyer and seller for double the comission.
In this type of situation, the bank misses out on other offers (potentially higher ones). I would expect that the bank would have a bit more control over something like this. Unless of course it's someone at the bank who is locking a house in for a family member or something along those lines.
It seems to me that any short sale home that goes pending the day of MLS release should have everyone involved thrown in a dark cell to be eaten by rats.
If you can't beat em, join em? Given how difficult it's been for me, maybe I should be contacting short sale listing agents the day a short sale comes on the market and request they be my agent? Maybe I should short sell my underwater home to my best friend and kick down a little grease money for the agent?
Discouraging all this is...
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The only way to fix it is to make it legal for the banks to list and auction their own REO - sort of act as their own little RTC for their own portfolios. They could go to old-line auction houses to set it up and run it and audit its performance themselves or through Kroll, etc.
Having a Realtor® anywhere in the neighborhood only guarantees criminality.
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BayArea says
Did you read this:
http://www.businessinsider.com/the-1-percent-is-buying-up-all-the-real-estate-beware-of-tom-lee-of-jpm-2012-5
And this:
http://www.businessinsider.com/the-great-las-vegas-real-estate-scam-2012-2
I wrote them. There is a scam. Watch out. They want another bubble, and the question is if they can pull it off. It will hurt main street but they don't give a damn.
And don't forget, they have their insider buddies with big credit lines as well as the hedge funds buying and YOU ARE NOT ALLOWED INTO THE PARTY.
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Hey, didn't you have a head shot with white hair, like a guy narrating a PBS special on the Swans of Central Alberta or something?
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APOCALYPSEFUCK is Shostakovich says
Yeah: http://strategicdefaultbooks.com The old pic is there. :)
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Hi Gary, thanks for the reads.
Just curious, what do you do for a living?
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No worries. It's only pension funds that are being lost. They might get replaced with funny money from the keyboard. Then everyone has 30% less buying power thanks to having to compete with the new sociopathic rich and whatever they decide to hoard that day (houses are in right now). The tax of inflation is equitable across the board. Of coarse if you don't happen to get the million dollar bonuses for running this game you just get confused. You might also wonder about the higher food prices and the new shitty landlord.
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BayArea says
This is standard realtor fraud and is usually the result of a smart investor working with the listing agent in the dual agency role.
I've been both the beneficiary and the victim of this tactic. The seller doesn't give a crap because he's underwater and the real victim is the bank who is only given a single bid to consider.
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BayArea says
I am old and retired. I contribute to Business Insider gratis. I write a few ebooks and enjoy my dog, Zoe.
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BayArea,
If I make an offer on a short sale there is always an acceptance date in the offer. Here we have to sign a multiple offer agreement. I sign but forget it. If the offer is not accepted by the offer date, I'm gone.
HEY YOU don't play that.
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Iwog, that's what I figured and thanks for confirming. I just need to figure out how to get a piece of the fraud pie before checks and balances come into play, and I think eventually they will.
HEY YOU says
I hear you, but at the same time when there are 10+ offers on a property, the acceptance date is often ignored and the bank operates at their own pace. Something tells me they don't lose very many bidders by playing like that, fortunately for them.
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Fremont, CA
The only way to win this game is not to play. That would be my opinion any way.
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I am practicing the following statement so I can deliver it flawlessly to the listing agent the day a short sale/REO property of interest comes on the market:
"Hello, I am interested in purchasing your listed property that came out on MLS today. I have no realtor representation and I want you to represent me. Where do I have to be for the house to go pending today?"
Now everyone try it, "Hello, ... "
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hey thats a good line.
also sneak in key words 'im pre approved, have excellent credit, large down payment'.
Agents are really good at sniffing out buyers who cant get loans or are wishy washy. Because agents who are bad at this leave the industry -everyone wastes their time.
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PockyClipsNow says
"Hello, I am interested in purchasing your listed property that came out on MLS today. I have no realtor representation and I want you to represent me. I'm pre-approved, have excellent credit, and a large down payment. Where do I have to come in at for the house to go pending today?"
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thats great! good luck.
short sales are all fraud as far as im concerned - and yet they are legal.
They are the best way to 'gettadeal' now I think.
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If it works, I will dedicate my success to your knowledge of realtor fraud and willingness to lend a helping hand :)
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Los Angeles, CA
It will work.
But you will still get 'beat out' by a list of known buyers the agent already has 'in pocket'.
You could also email every agent in town and state what you are looking for and that they should contact you if they get a listing asap. Get thier contact info from thier listings past and present from redfin.
There are only 3 types of agents im my experience:
1. Lazy (mostly bored house wives who dont need to work)
2. Crooks (motivated to earn high $)
3. Lazy Crooks (this is largest category)
You won't find any hardworking+honest agents. You are lucky to get an honest lazy one (#1 above) but this person is too lazy to get a broker license and be independent broker so they are attached to a #2 which can make problems for you.
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Can you smell something?
Listed and price dropped $94,600 in the same day just before the July 4th holiday and pending the first working day after.
Property History for 187 TRESTLE Cv. Hercules, CA
Date Event Price Appreciation Source
Jul 05, 2012 Pending -- -- EBRD #1
Jul 02, 2012 Price Changed $504,400 -- EBRD #1
Jul 02, 2012 Listed (New) $599,000 -- EBRD #1
Dec 19, 2003 Sold (Public Records) $732,500 -- Public Records
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187 TRESTLE Cv. Hercules, CA
Hercules? SFace, are you buying?
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Not in office for two days. Just clicked on the email as new list from Redfin, but see "pending".
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BobMSN says
Stinks, pew!
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Anyone knows where to report if a fraud is suspected?
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BobMSN says
It would be like reporting liar loans in 2005. No one cares.
The victims are the banks, and since they are getting free money from the fed, the REAL victims are people with no control over anything: American citizens at large.
Unrestrained free market capitalism at its finest.
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BayArea says
LOL! You're funny. You'd have to do better than that. One thing you're missing from your equation is CASH. :o)
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E-man says
Ya think? My 25% DP is not enticing enough to have the realtor try to double dip with me?
I guess it will come down to which double dip option looks best for the selling agent huh?
One thing is for sure, doing it this way without 100% cash will give me a better chance than running around with my current agent which has gotten me nowhere in the past 6 months.
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This is the best way IMO. Worst way is probably use a refin agent - you have 2 huge issues there 1. buyers agent and 2. a discounter the big brokers hate hate hate.
Some friends of mine who are not obsessed with RE just got a screaming deal, guess how? they simply were at the open house and said 'no im not working with an agent' and bammmo, they won the short sale. amaazing huh? The buyers agent unfortunately is a deal killer in a hot market they got 10 offers to choose, first they flush the ones with buyers agents. then filter the rest. but not always. they might let you outbid 10 others if you are lucky and have a buyers agent.
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BayArea says
Or this:
"Hello, Asshole. My cousin is the assistant county prosecutor and he's looking at the last 15 deals you've done and will find out the nasty referrals you made to your scummy fucking broker friend and you will end up in a shithole of a prison with neonazi serial killer dick in your ass unless you shut the fuck up and get the seller to take the right price, my price. We're done talking now, asshole. My generous offer is in your mail box. You've got 4 hours to get the right thing done."
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LOL!
And I thought I had it right
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I understand your frustration. There is a lot of fraud with short sale. But if you think the seller is looking for the highest best offer your wrong. The sellers are looking to avoid foreclosure. Our job as realtors is NOT to get the bank the highest and best offer as you seem to think. Because 1. we work for the seller not the bank. 2. that highest and best offer will jump on the newest hot piece of crap that hits the market! Causing the seller to lose the property to foreclosure. Thus giving the bank a hard on thinking they will get that price when they take it back as an REO. Any property I list now in July needs to have a low enough price so that if the buyer walks while I'm in negotiations I can still move the property in Oct or Nov and not have to start the whole process over again. Realtors that double end Short sales are looking for trouble. http://www.ShortsaleinLosAngeles.com
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Patrick- below is a brief history of one of ten houses the same buyers agent has tied up from the day the home is listed. In each case the house is listed as pending. Then as time goes on it changes status several times and in each case the house is sold for far less than the list price and there is zero competition. The buyers agent has done this 8 times in the past year with the same 3 buyers but he is not the listing agent. I know this is a scam but this foursome is making a killing with no competition. How dose this work and which one of the parties is committing fraud?. See below one example of the history. All the homes are in one city in Southern California. PS-I know the investors and their agent. They know I know and are not saying a word.
Records For completeness, Redfin often displays two records for one sale: the MLS record and the public record. Learn More. Date
Event Price Appreciation Source Oct 26, 2011 Sold (Public Records) $240,000 — Public Records Oct 26, 2011 Sold (MLS) (Closed) $240,000 — CRMLS # Oct 25, 2011 Pending (Backup Offers Accepted) —CRMLS #
Oct 05, 2011 Pending — CRMLS # Sep 30, 2011
Relisted (Active) —CRMLS #
Sep 25, 2011 Pending — CRMLS #
Sep 13, 2011 Price Changed $250,000 — CRMLS #
Sep 09, 2011 Price Changed $252,000 — CRMLS #
Sep 02, 2011 Price Changed (Active) $257,000 — CRMLS #
Sep 02, 2011 Relisted (Active) —CRMLS #
Aug 24, 2011 Delisted (Hold) — CRMLS #
Aug 19, 2011 Price Changed $260,000 — CRMLS #
Aug 17, 2011 Price Changed $270,000 — CRMLS
Aug 12, 2011 Price Changed $280,000 — CRMLS
Jun 16, 2011 Price Changed $285,000 — CRMLS #
Jun 09, 2011 Price Changed $290,000 — CRMLS #
May 13, 2011 Price Changed $294,000 — CRMLS #
May 06, 2011 Price Changed $299,000 — CRMLS #
Apr 29, 2011 Price Changed $305,000 — CRMLS #
Apr 22, 2011 Price Changed $310,000 — CRMLS #
Apr 14, 2011 Listed (Active) $315,000 — CRMLS #
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BayArea@11
I agree with you on the other 10 offers & the banks position.
inflection point@12 covered my feelings
"The only way to win this game is not to play. That would be my opinion any way."
If nobody plays there will not be a game. Banks lose?
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PockyClipsNow says
Lucky. My experience with short sales here in the Bay Area has been one of the following:
a.) pending the day it comes on the market before you can even establish contact with the selling agent
or
b.) open house arranged for a 1hr period during the week the house comes on the market with 20+ people showing up trying to find something in common with the seller assuming they are present (oh, we are the same religion or I also have kids your age, or we are both from India, etc).
It get's really frustrating when the selling agent has a buyer lined up and does the open house anyway to go through the motions to make it look a little less fraudulent. 20+ people waste their Sunday and several trees are killed in paperwork as everyone submits an offer.
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bgamall4 says
And fight for liberty and justice!