Comment

Comment by Cathy Baumbusch on October 1, 2011 at 4:18pm

Wow.

Comment by The Negotiator on October 1, 2011 at 4:07pm

@ Phil ... When did you teach Realtor school in Florida?

 

@ Cathy... I (me, I) was originally talking about fraud and then in merged with arm's length. I was talking about my original posts, which, were talking about fraud alone. Also, does every single lender require an arm's length? Nope! I would never recommend perjuring ones self. So, I'm not sure why you keep acting like I would blatantly do something naughty. I also like you how are moving away from fraud towards unethical. At least, I got you away from my idea being solely fraud. Let me ask ya, do you let the banks negotiator know they are being "unethical" when they conceal their BPO amount or maybe even fraudulent? Also, Realtors are not parties to the transaction because only the buyer and seller are. Anyway.. good talks. BTW, I like how you looked up my personal name and used it. Is that 7th grade or 8th? I'm done with this one.

@ Anna ... they sometimes do, but, not all lenders do. Like I said, you don't want to lie. Isn't silly how short sales change the rules of everything? On a regular transaction, you can obviously be the buyer and agent. I think that it's that little word "fraud" that has beat the dead horse and caused all this dis-trust. Each state is different... check your local listings...

Comment by Anna "Banana" Kruchten on October 1, 2011 at 1:05pm

I'd also like to point out the many banks are requiring a 'paper chase' of who the real buyer is if it's an LLC. Most want the incorporation docs. I can't imagine trying to hide that one is the buyer of a home and/or the buyer of their own listing.  This is a brokers nightmare.  Talk to your broker about this - upfront.

Comment by Cathy Baumbusch on October 1, 2011 at 12:34pm

It is a pet peeve of mine for agents to use the term "highest and best" in terms of offers for property. Highest and best is a term that was used in the appraisal world, it is a method of determining value by looking at the "highest and best use" of the property- what is the best use of the property that would make it the most valuable. The proper business term when dealing with offers is "Best and Final" or BAFO. OK, I just had to say that because it makes me crazy. (Sorry Phil!)

 

I don't price my listings purposely low, I price my listings according to the comparables, taking into consideration its condition and other factors. The BPOs and appraisals that come in are always pretty close to what the original price we set. I tell buyer agents to give me their client's best offer up front. Come in with your best offer from the beginning, no games, no lowballing. If you price it too low you may very well end up with an offer from a buyer who would not be able to qualify for the higher price the bank is inevitably going to come back with. Even with that, we still get multiple offers. If they all come in on the same day or before my scheduled time with the seller to present offers, I let the agents know there are multiple offers. But in some price ranges, its almost assumed that there will be, so you go in with your best. As I said before, my job is to a) get it sold before the foreclosure sale, b) get the best possible price so that the bank approves the short sale without having to renegotiate, and c) make sure its a buyer who can actually close the deal. If I was trying to represent myself as the buyer, you also have dual agency, possibly undisclosed dual agency (shudder)...The majority of agents in this market don't do dual agency- just too many opportunities to have a conflict.

Comment by Cathy Baumbusch on October 1, 2011 at 12:11pm

Ben Johnson, (Negotiator), let me help you out. We absolutely WERE talking about Arm’s Length. Shane Fiest was surprised to find out that Wells Fargo would not approve the short sale for his buyer because he was the listing agent, to which Kevin and Cody responded with information about Arm’s Length. (Hello? Arms Length?) Your response to Shane was “Next time, don't put your personal name as the listing agent. Use only your brokerage firm name. Then, maybe, get an LLC if you didn't already to use as your buying entity.” That answer appalled many of us here because it clearly violates the “Arms Length Transaction” rules, guidance, laws, whatever you want to call it. According to Fannie, it is absolutely fraud to “conceal the parties to a transaction”, which to me would include concealing the name of the listing agent/buyer for the purposes of buying the property yourself (which would be a non-Arm’s Length transaction). It is at best unethical, at worst illegal and/or fradulent to pass off a transaction as Arm’s Length when you are the listing agent as well as the buyer, or if you are the listing agent and you own the LLC that is the buyer. That is all. Not going to waste any more of my time on this.

Comment by Joe Green on October 1, 2011 at 11:19am

I'm amazed that lenders would allow buyers side of the transaction to negotiate. As I see it they are there to negotiate for the buyers low price, not the sellers interest. Also If i'm not mistaken the seller is the only one that could give Authorization to Release Information to the buyers side, which I guess is possible and even encouraged in some states.

Comment by Joe Green on October 1, 2011 at 11:15am

One thing I noticed is that there could be multiple right answers based on the state you live in.  If you're in TX and you only have 21 days (@Brenda)  well then there is a rush and yes you would take just about any offer to the bank.  In Illinois there is a 7 month wait before they can foreclose, and the courts are so backed up it's taking more like 14-16 months before a foreclosure, so I do have time, so I wouldn't be inclined to take just any offer to the bank.  If I get a low ball offer I don't suggest the seller accept it, but instead tell them to wait while we do are price reductions to get us to a point where we could get a strong enough offer to submit.  Yes timing is everything.  If i'm running a year into the process I might take a low offer.

Comment by Phil Putnam on October 1, 2011 at 10:12am

Amazing, little do you know. They do teach Short Sales in realtor school, I am instructor certified by the AZ Dept of Real Estate and have been teaching short sales for 6 years now. You can try and defend yourself, your actions and your theories all you want, the majority of the people on this site have it right. Highest and Best does lead to success and full disclosure with no hidden agendas will make us all sleep well at night. I don't think any us want to be looking over our shoulder for the next many years wondering.

Comment by The Negotiator on October 1, 2011 at 10:06am

It still amazes me when I hear Realtors say that they anything other than their job is to get the house sold when dealing with a short sale. How could it possible be anything different? Highest and best? Why? That could cause more delays while the foreclosure clock is ticking AND it leaves you know room to come up. Granted, you don't want to consider a 5k offer on a 100k listing. With a lower offer you have the ability to come up with that offer and that pays HUGE dividends (2nd wants more than the 1st is offering .. who pays?) Starting a listing high and/or trying to get the highest offer is the kiss of death. You cannot merge standard sale tactics with short sale tactics. This is why they don't teach about a short sale in Realtor school ... do they now?

Comment by The Negotiator on October 1, 2011 at 9:57am

Cathy - You are merging two different arguments into one. Nothing we were talking about before (listing and fraud) was about arm's length. If you want to change topic to arm's length, let's do it. If you break the arm's length affidavit (or lie) then it wouldn't be fraud. I believe it would be perjury. Am I right?

 

By the way, Fannie does not make the law regarding fraud. You are referring to their opinion about fraud and that is far from law. I also remember Fannie (possibly Freddie) releasing an article earlier this year talking about how investors and back to back closings are complete fraud. The article was baseless and had no factual evidence. The point is that the source is far from reputable.Heck, they can't even run a business without a bail-out.

 

Also, our listing agreements ask for the broker and not the individual name. Maybe your listings are different. If so, then our debate is a waste of time.

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