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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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..

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!

 

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.

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.

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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.

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