Bay Area

[tkn4ride]

Hi all,

I've been impressed at the knowledge and glad of the advice I've seen posted on these forums, and I've got a question I hope you can help me answer.

I was trying to buy a house from a person I though was the owner, but it turned out he was trying to flip the house by buying it himself for cheap, then immediately reselling it to me for a profit.  The first sale didn't go through and now the listing agent says the real owner has decided to get a loan re-modification instead.  My buying agent has been either in the dark about what was really going on, or unwilling to level with me about it.  Is there any reason I shouldn't try to contact the owner directly to see if they'd be interested in my offer?

[TerriM]

That's really weird!

I don't see why you shouldn't contact the owner.  Just make sure you know exactly who they are

Did the person who tried (falsely) selling you the home have an agent?  If so, I have to wonder why they didn't realize that this person wasn't the owner.  Wonder if the agent knew what was happening--if so you should report them.

[tkn4ride]

The listing agent says he knew about the fraudulent seller's plans but didn't want anything to do with it, so he delisted the house. We just found out about the listing agent - he wasn't part of any of the negotiations until my sale fell through. That's when we found out about him.  My agent finally contacted him, he said he'd check with the real seller to see if he wanted to sell to me, and then got back to my agent saying the real seller didn't want to sell anymore. My agent won't contact the real seller - just wondering if the real seller has any idea about all of this. If not, I'm thinking of contacting him directly to see if he really doesn't want to sell.  I'm just wondering if there are privacy issues or something. It seems like my agent doesn't want to contact the real seller and I don't get it.

[TerriM]

Did the guy you were trying to buy from have an agent?  He/she's the one who should be getting in trouble.

I think there are generally unspoken barriers in the RE business.  Agents talk to agents.  Agents talk to their clients, but you don't normally cross the stream.  Some agents ask why I'm asking them questions directly instead of going through my agent.  I think it's just the way they're used to operating. 

However, it doesn't stop you from knocking on the person's door and talking to them.  Your agents will want a cut of the deal, though, since they were a part of you finding the house.

[norcalnative]

Wow your lucky. The latest scam taking place these days are people trying to sell homes they don't own. Think bank owned empty homes off the radar and buyers who are very interested in finding cheap special deals. LOL perfect conditions for the Con Man.

[buyinghouse]

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tkn4ride wrote:

The listing agent says he knew about the fraudulent seller's plans but didn't want anything to do with it, so he delisted the house. We just found out about the listing agent - he wasn't part of any of the negotiations until my sale fell through. That's when we found out about him.  My agent finally contacted him, he said he'd check with the real seller to see if he wanted to sell to me, and then got back to my agent saying the real seller didn't want to sell anymore. My agent won't contact the real seller - just wondering if the real seller has any idea about all of this. If not, I'm thinking of contacting him directly to see if he really doesn't want to sell.  I'm just wondering if there are privacy issues or something. It seems like my agent doesn't want to contact the real seller and I don't get it.

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Confusing..........The listing agent knew about the fraudulent plans but didn't want anything to do with it?

 And then the listing agent wasn't part of the negotiations? So, who was the one accepting the offer? I thought the one accepting the offer is the listing agent with the seller's approval?   Then, we see a "real seller"?  Wait, how many sellers are there?

  By the way, a loan modification is taking as long as the recession, so, if the seller is doing that, forget it, he won't be able to do anything until after he ends up with the final value or loan modified.

   If somebody is pretending (signing) to be the owner, there's a misrepresentation. Call it that or fraud. Call the DRE at dre.ca.gov

[M-R]

Google the key word "double closing" to see what's going on here: The "real seller" and the "fake seller" are collaborating to fraudulently extract some equity in a short sale situation. The main victim of this fraud is the bank. It goes like this: The fake seller tries to find a buyer at a sales price as high as possible. The fake seller (who usually is specializing in this kind of scam and is an excellent negotiator) then tries to negotiate a short sale price with the bank significantly below the sales price that the buyer agreed to. If the bank does not agree, then the transaction falls apart, otherwise there will be a double closing. In the double closing, the real seller first transfers the property to the fake seller at the lower short sale price. The fake seller then transfers the property to the buyer at the higher sales price on the same day. The real seller and the fake seller split the difference as "extracted equity".  In addition to the real seller and the fake seller, there also needs to be an unethical escrow company involved that supports this kind of scam. The buyer is not necessarily victimized, but may end up overpaying due to the negotiation skills of the fake seller.

The listing agent acted ethically by refusing to participate. This may be a sign that the fake seller was not doing this as a business since he would have brought in an agent that supported this scam.

Since the real seller is part of this scam, you would likely be wasting your time contacting him directly since he is apparently not interested in selling without getting some equity back. If you go ahead and knowingly participate in such a scheme as a buyer, there could be plenty of legal downside risk in case the bank finds out what is going on. It's probably better to wait and see if the bank forecloses and then buy the house the legal way for a likely lower price.

[tjh]

M-R:

If that is the case, why should the buyer not attempt to go straight to the bank? 

[dgies]

The bank can't force a short sale.  All they can do is foreclose, assuming the owner is delinquent.

If you contact the bank, and if you can talk to someone who cares, the most that would happen is the bank might decide to never allow a short sale because they've been alerted to fraud.  Then you might get a shot at the house when it turns up as REO much later.

[tjh]

dgies:

I realize that. 

My thinking was, if it is an actual case of fraud, the bank is likely to take an action that will result in penalties/punishment for the perps. 

If it isn't and, they were willing to entertain a short sale offer on the property, you'd be ensuring that yours, at the price you're willing to pay, goes in front of them.

Maybe both if one is lucky!