The market heating up does not come without its pitfalls. Everyday we hear of fraudulent real estate deals going down and it seems very evident that the ugly head of greed amongst agents and buyers is being visible to us. Curious to know what is a fraud deal? You will know once the DRE opens up an investigation against these agents and when clean title does not transfer over.
For us in the industry it is very easy to smell foul play. In Windemere, there was one listing recently. This home came on the market for a ridiculously low price last year, short sale and the agent decided to give himself an ego boost by having hundreds of people at the open house with an open bidding. This agent then pretended to keep me in play by calling me and telling me that his offers were up 225,000 more than what he listed it for and asked if I wanted to up my offer. I declined. This home went pending with his own broker, and the MLS rules were constantly flouted by changing the status of this listing. Eventually the listing sold a few days ago for a lot less than what he had told me the offers were running at and 2 days later the same house was listed again ( as a flip) for $130,000 more than the closing price !!!!!
This is not only real estate fraud but this agent defrauded the short sale bank, that lost huge amount of money. This is a criminal offense punishable under the law. But yet this agent did not stop at this listing. His track record spans over multiple short sale listings. His target is short sale candidates and how to exploit them for his own gain !
Here is another scam that is rampant- before the short sale bank does their appraisal to determine the value of the asset, the seller and agent gut the house causing an immediate depreciation of value. Once the appraisal is over and the lower value is determined, the property is fixed up and is made ready for the flip !! Short sale transactions require signatures on an Arms length affidavit, clearly stating that the house cannot be sold to any individual who is related to the seller or their agent. I am seeing agents buying their own listings with their spouses or family members with different last names and not declaring to the sellers about it !! or even heard os instances where the seller was paid cash, “under the table” to cooperate.
People involved in these kind of shady deals need to be reminded that greed will have a nasty end. You can run but cannot hide from the law. Awareness in customers is a key that anyone participating in these transactions comes under scrutiny. All it needs is one leak on the deal going down and the house of car will come crashing down. Every day there is an innovative way to scam the system and as a real estate professional, it surprises me to see these creative ways of committing fraud. Sellers and buyers need to be careful, have their facts together before they fall into this trap. The DRE should be investigating this fraud more and more and keep consumers safe from falling prey to these scams. If you are a consumer who has been a victim, speak up and let your voice be heard !