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Arms length transaction?

Posted by Amy Summers on November 11, 2011 at 6:48am in Short Sale Discussions

I have been asked to do a short sale. The owner of the home is also an officer of the corporation that owns our brokerage.  I am also an officer.  I have a feeling that this could be an issue with "arms length".

 

Any input from my knowledgeable colleagues? 

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Replies

  • Donald Johnson November 13, 2011 at 9:03am

    The first point I would make on this subject is that Realtors can always call their Legal Hotlines for advice on areas such as this for no more than the cost of your annual dues.

     

    The next area is the definition of "Arms Length Transaction". Although I could recite what exactly should constitute an at arms length vs non-arms length, it is better to use guidelines that those with veto power may be more likely to use given today's environment.

     

    So for all of you, here is a link for Fannie Mae that gives us some very specific guidelines they are using to review work we are submitting: (I also added the PDF below in case you're lazy ... lol ... kidding ... but no really it's there)

     

    https://www.efanniemae.com/utility/legal/pdf/commonredflags.pdf

     

    Please note, I am not the author of this work, I accept no legal liability for your use or non-use of this material.

     

    Please feel free to send me a friend request. I just started on this site, well actually today is my first response. I saw this in my inbox and decided it is an important issue we must all be aware of in order to avoid any acts of, or seemingly perceived acts of, fraud.

    commonredflags.pdf

    • Rochelle Castro > Donald Johnson November 14, 2011 at 6:18am

      I agree with Donald Johnson.  Thats why C.A.R. is there to help us with the legal end of things.  If you still have doubts, refere it to someone else.  For me, no deal is worth risking my license.

  • Kari A. Battaglia November 13, 2011 at 2:21am

    Refer this to another short sale specialist.  You don't want to go through the entire short sale process only to be denied in the end.

  • MVicki Ponce November 13, 2011 at 1:53am

    If you have any inkling of a doubt, that is a clue, give it to

    someone else!  the bells are ringing listen to the alarms!

     

  • Kimberley Kelly November 12, 2011 at 3:25am

    Yep..issue.  The Arms Length may not even nail your relationship exactly, but it may very well be turned down after procurring a buyer..why go there?  Give it to an outside Short Sale Specialist in your area..just a suggestion..

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