Replies to This Discussion

Permalink Reply by Vanessa Calhoun on April 6, 2011 at 3:30am

Walter, I'm sorry, but your intentions were pretty clear in your statement. Furthermore, there's no need for us to further this discussion at all.

 

Have an excellent day!

Walter Rock said:

Vanessa, I don't see where I suggested submitting a dummy offer.  I would suggest that a friend, in good faith, submit a low offer and if they get the property, then they got a good deal.  If the bank counter-offers, then the buyer doesn't have to purchase and the foreclosure is postponed.  I suggest that you not make assumptions or give legal advice, unless you are an attorney.  If you want to continue this conversation off-line, then contact me, but this forum is not the place to further this conversation.

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Permalink Reply by Jeff Payne on April 6, 2011 at 3:42am

Walter, unless the "friend" was intending to purchase the property, it is a dummy contract.  Could be a very slippery slope, especially if the bank accepted the offer and the friend did not purchase.  Would you disclose to the bank that the seller and buyer have a relationship?

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Permalink Reply by Raymond Kennedy on April 6, 2011 at 4:10am

It's an Arms length transaction as long as the friend is not related by family or business. Basically as long as their is no paper trail showing their is a business or family relation there is no duty to disclose to bank.

Dummy contracts are risky if the bank can prove it but depending on how a contract is written there are many options to get out of the contract on the buyers end without breach. Banks are not party to a contract and can't dictate terms of a contract but only approve or disapprove their loss and costs involved so contractually the buyer is not responsible to the bank only the seller in terms of the contract. The only risk there for the buyer is if the seller decided to hold the buyer to the contract terms. Other risks is if the bank could prove it was a fraudulent contract but I don't imagine that could done easily. 

Either way be very careful with that tactic, that could be fraud if the buyer is not truly a willing and able buyer and this can be proven that you had knowledge of that.

 

This is a tactic, just not a very ethical one but we all know it has been done.

 

Jeff Payne said:

Walter, unless the "friend" was intending to purchase the property, it is a dummy contract.  Could be a very slippery slope, especially if the bank accepted the offer and the friend did not purchase.  Would you disclose to the bank that the seller and buyer have a relationship?

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