Over the last year or so we have interviewed some of the best foreclosure short sale REO agents in the USA and have met scores of top notch go-getters who are blazing the path to profits and are unbelievable liquidators.
One team up in the Baltimore, Md. area has at any one time 2,500 REO properties under management and they are absolutely killing it! Man I wish I could do business with people like them on an ongoing basis.
Agents like Dave and Bonnie McIlvaine are consummate professionals. We loved hearing and reading about their operation. They were even featured on CNN!
Paula Pompa, a stellar REO agent from here in our neck of the woods, filled us in on just how she has been able to achieve her success. Her interview told us what kind of resources and business acumen one needs to be a top foreclosure short sale REO agent.
Then…we get the others. The slicksters, the scammers, the fraudsters. You know it seems that many agents like to point the finger at everyone else but in the foreclosure short sale market, there are some agents out there that just plain need to be taken down.
My good friend Dave Dinkel is one of the people who runs the Broward Real Estate Investors Association down here in South Florida. Yesterday I got an email from Dave that I want to share with you in the hopes that some brokers and REO asset managers wake up and see what’s going on out there:
As the wave of REO’s continues to grow, great deals seem be had almost at will. The usual procedure is for the lender to list the REO property with his favorite local realtor and wait to see what happens.
Depending on the lender’s urgency to move the property, he may reduce the price 2 – 3 times, and drop the bottom out to get a hoard of investors into the bidding game.
Lenders are only listing about 1/3 of their REO’s because it doesn’t matter if they are all listed, there is a finite amount of buyers – including investors. Realtors play the game of “put in your best bid” and see what happens.
Often they hold the contracts to get the investor frenzy stirred up even more and then they should take the highest bid to the lender for approval.
The usual type of fraud(?) or unprofessional action we see on an ongoing basis is where the realtor accepts a contract for a lower price because of favoritism, friendship, or kickbacks from the lower bidder. I have repeatedly told our members to only deal with the listing broker because when you make an offer through another broker the listing agent has to split the 5% commission.
If you place the offer directly, the listing broker will retain the entire commission. I have been stuck in this situation on a number of occasions because my buyer’s broker assured me it wouldn’t happen and it did as usual.
How do I know? Because I looked in the Clerk’s site and saw the buyer paid less than I offered. Shame on me because it happened more than a few times!
Well I did the right thing just last Wednesday and made a direct offer to the listing agent (well-known broker) and I asked her if there was a contract on the property. She explained that one was to be sent in later that day for the full asking price so the deal was done.
I asked again if the lender had seen the contract and accepted it and she said it hadn’t been received by her yet. I explained that I wanted to submit our own contract and she said it was OK but didn’t think the lender would accept it. What?
How did she know the lender wouldn’t accept it? I asked that question and she said the other buyer has made the first offer. I explained that I wanted to make a higher offer and I was sure the lender would consider it because we could close in 10 days or less.
She said she would send it and she would fax the offers in later that day after the other offer came in and let us know on Friday. Friday came and went and Monday morning she called to tell us that the other lower offer had been accepted because it came in first!
I am really curious if her broker is involved in this “unusual” transaction or just the agent. I know I made a higher offer and had proof of funds to close, etc.
My options now are to make a complaint to the Attorney General’s Office – you can do this online, to the FDBR and to the Realtor’s Association.
I consider her actions fraudulent because the lender did not receive the best offer, she apparently lied to me, her broker may have been involved in the cover-up or she also defrauded him! She is supposed to be a licensed professional that is held to a higher standard. This is why realtors are licensed and have a professional designation – or so we would expect.
We see this happening time and time again. So what say you? Have you seen this fraudulent activity in your market? Going to do something about it? The foreclosure short sale market will only be increasing. Something needs to be done.
Just to give you a little more of the inside scoop. Alot of the banks have website that you have to upload offers into. There have been many times that I had higher and better offers, but was only able to submit one offer at a time. Only one offer can be dealt with at a time. If the first offer has a counter offer and it is accepted then the other offers do not get a chance to be submitted. You might want to learn the inside systems before you raise hell and yell Fraud!! It does not reflect well on you.
Thank you,
Ranked 10 in the nation in REO sales
Hey REO Expert…or should I say anonymous REO expert. I’ll say this as politely as possible. You’re full of shit!
Thanks for the comment!
This just happened to me. I’m not an expert but it seems fishy to me.
Short sale, the listing agent had a deadline of Nov. 7th, when he was going to present the highest offers to the bank. I had financing with my own lender & proof of funds, however I still was required to get prequalified with Wells Fargo (their bank), which I did.
The house was listed at $395K, I offered $406K.
I contacted the selling agent and they told me that I should move on, they had 2 offers significantly higher than mine, approximately $30K over list price, and they were solid offers so there was very little probability of the offers falling through.
I moved on only to see the house was sold for $400K. I was lied to by their listing agent. My sister works in real estate and told me she thinks they basically sold it to someone they knew and didn’t submit my offer to the bank.
It was a very crappy way NOT to get a house.
Anyways I’m going to contact Wells Fargo directly tomorrow to let them know what happened.
-isaac
Are banks stealing america’s money?
Wells Fargo is Bank of America now. this is absolutely happening, and every friggin day.
Item:
The buyers agent contacts the Condo Association for approval, and there isn’t even a signed contract. when quizzed about that fact ,the buyers agent (selling agent) said “Is that important?” (true story)
It seems to work this way. A listing agent (FRONT) puts the listing in the MLS but is difficult if not impossible to reach.
An offer somehow makes it through, (backdoor) and the selling agent contacts the association and handles all the paperwork and escrow letters and does all the work normally done by a listing agent.(weird!)
I am an agent and have a relationship with a Condo bldg. I am also an LCam. I have seen this from all sides, it is all bullshit. The bank’s are in on it. Lasalle bank said “we can accept any offer we want.” how many billions did we give BA?
Bank America took over Lasalle also.
My guy offered 40K first, bank refused it, sent it to auction and took 25K they could have had 40 but no………….
The association had right of first refusal and exercised it. They matched the price and terms at 25, The bank did everything to screw up the deal and finally the association gave up. Then the reo manager from the bank accused the association of sticking their nose into a done-deal!
The condo was just exercising its right to protect itself.
the property came back on the market, (the auction winner had split) my original buyer offered full price immediately, but- you guessed it, another lower offer was already accepted. I reached the listing agent and she nearly fudged her drawers herself when I asked why my offer was rejected.
She quoted three different effective dates and basically got really shook up -she knew she was in the middle and was freakin’ big time.
I thought about writing an article showing how and where the money was being wasted by the banks but thought, screw it!
6 months later, same bldg, different unit, same Bank, different agents, same scam. Can you believe the balls on these bastards.
This is artificially lowering the bldg’s comps, is a violation of the NAR code of ethics and may be out and out fraud.
Just a small example, can you imagine how much money is being given away nationwide by banks by this crappy behavior?
Where is the oversight of the disposition of billions in assets?
It’s happening all the time in South florida. Reos list the property for a day or two before the keys are suddenly missing from the lockbox & it “can’t be shown”. Offers are due in to the bank during that same time, by the fifth day it is a pending sale. Amazing how fast it sells considering no one gets a chance to see it.
Many of these are already done deals before they are shown on the multiple listings system, they just do it to meet the listing contract requirements. They submit their own offers, are definitely not submitting outside agents’ offers. Properties end up closing far lower than offers submitted, even cash offers.
It is chronic, and it is getting worse. Don’t understand what is taking so long for Tallahassee to get off their rear ends & do something.
I own a condo in a luxury South Beach hi rise. The unit above mine was mortgage fraud. Owner had 1.3m in debt on it. Short sale listed at 600k, closed at 625k. 2 other units in the same line went pending sale at the same time for 850k, and are now stalled because of this fraudulent 200k drop in value. Why would a bank take this hit if the market was clearly 250k more?? FRAUD. How do I fight it? Please help.
Hey Darren…the fraud, if any, would have been on the front end. If the bank accepted a short payoff of 625k are you saying the bank committed fraud because they took a lower offer?
The bank must have done a BPO and there must have been something in that report that told them to RUN!
How many foreclosures are there in the building? Is the HOa strong and paying their bills and keeping up on the property. Are there liens and lawsuits on the building that you don’t know about? ..there could be a host of reasons why they cut bait. I would seek to find out what their report says by possibly doing my own appraisal and inspection.
This is happening like crazy in Texas. Dallas has been known for many things, but I was not aware real estate fraud was one of them. I have small time real estate brokers and agents in the family, as well as painting and carpentry contractors who have worked on FHA, etc properties for years. No one has ever seen this before. They thought I was crazy when I told them of stumbling onto a house close to where I was looking as a first time buyer, finding a listing agent’s info clearly in place outside, and receiving a call back from her assistant telling me house was “not available”. I looked up the house info on the Dallas County Appraisal site and the house has been vacant and foreclosed on for three years! I had to call the city, the listing bank and Fannie Mae. I called my state rep, the media and the Texas Real Estate Commission looking for answers as to why I was prohibited from seeing the property or making an offer. I called the head of the real estate commission directly and after hearing what I had to say, basically told me to pay a lot of extra money to hire someone to do what I had already done myself, then told me to “screw off” and hung up on me when I protested his “advice“. I am flabbergasted. I have money and credit and just want to find a good property that I can work with…What I am hearing on the news and from the White House does not match up with what I am experiencing. If anyone knows a way through this mess, I would appreciate a heads up.
After all I went through, I just found out that the listing agent had a guy willing to pay $25K less (cash) as an investor and was “holding” the property all this time! I was willing to pay the asking price!! Why can only “investors” get in on these properties? Is America going to be turned into rental property one neighborhood at a time, where only the elite “investors” can own a home?? This is total crap!!!
My experience in South Florida is similar. I have been told my bid was too low, only to see the house go for a lower price. It is the taxpayers that are getting scammed on this. Some brokers are simply not taking the highest offer. I believe that often they are funnelling the homes to investors who are making multiple purchases, perhaps then providing kickbacks to the agent.. Another tactic i have encountered is that agents will stonewall you on a property, make you wait, give false information or simply not return multiple calls. I can’t count the number of agents that would not return calls or fail to follow up. Call it whatever you want but the market in some areas is corrupt. I hope someone fully investigages this out. It would make a great Fox segment
A lot of properties in South Florida are being sold -out the back door, or to friends and families or friends of friends. The Banks don’t care one bit, bailout or no bailout ,banks don’t seem to care if they get the “highest and best offer.” They should be held accountable and made to accept the better offer. I understand, terms can be different, such as all cash, close in 10 days as opposed to a higher price with longer closing time and lenders to deal with but all else being equal-higher is better.
I had a REO manager tell me “We can accept any offer we want”
And they did. 40% less than my client offered.
And not once, not twice, but multiple times, same thing.
The listing agents are having a field day.
Richard T hit on the head. The same thing is happening in Colorado. We’ve complained to the Division of Real Estate and the Atty General but know nothing will come of it. This fraudulent behavior is going on across the country. Something needs to be done to stop this madness.
Ethics anyone?
I am at present in process of a short sale home. I made offer and gave earnest money through a buying agent. the selling agent accepted the offer, the so called “process” took several months. I had a buyer for my home and business and held closing until I received word from the selling agent that all things are complete and ready to close, which finally after 5 months did happen. They gave word to my buying agent closing needed to happen in a couple days. Well since I don’t have that sort of money directly handy, *even if you have that sort of money it takes sometime a couple weeks to a month to make it available* I had all monies in hand in 10 days, my buying contract gave me 30 days. I closed on my home “now I have no place to live after this weeks end” and I have sold my business “I have to income” due to my move was a 150 mile relocation, now I am getting problems and delays on the closing. I do believe I am being scamed, the selling agent now wants to “RENT” me the home at a very highly inflated price along with a statement in the lease that I can be evicted in 15 days, All this by long and foster in the front royal VA area
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Hi Bob…sounds like you got the wrong end of the stick..I would contact the loacal board of realtors and file a complaint. This kind of stuff has got to be exposed and brought to the forefront! Who was the slimy selling agent? Let us know so that we can let others know!
So i finally got a house. basically i had to borrow personal funds to submit an all cash offer at a bankruptcy court, as soon as it closes i have to turn around and cash-out refinance, fun stuff.
It’s the only way i could figure out to get around the rat bastard ‘listing agents’ that block every offer except their friends.
I’m in southern california – orange county. the real estate fraud amongst realtors is ridiculous. I was actually putting in ALL CASH offers, and trying to use the listing agent to put through the offer (so they could double-side the commission) on the 1st day the properties were coming out on the market – and still not getting the property even though my offer was higher. usually i’d submit my intent to use the listing agent as my buying agent, through phone, e-mail, and every possible mode of communication… then the listing agent would avoid all calls, not get back to me or anybody for 5 days, and then they mysteriously had already accepted an offer… REALLY???! when i had submitted an offer at 9am the 1st day it was listed???
it’s a bunch of bull – cra p!!! anyways… my advice is to get cash someway somehow, and buy at courthouse auctions. It’s more work upfront and you have to be very careful with the title search issues, BUT you don’t have to deal with the crooks and ultimately money talks, but it’s a fair auction. ONLY do courthouse auctions – NOT REDC/auctionDOTcom… they’re crooks too, read the fine print.
my 2 cents
-isaac
You are just touching on the REO Listing Pigs and Corruption. These agents delay MLS input until they advertise and hold open houses to get both sides. We are left with the crumbs to sell.
I also want to mention that the bank REO managers are demanding kickbacks to play the game .
There are so many ways that the potential co-op agents get screwed without recourse (we can’t see inside the transaction and neither can the board) that I hate to even work with buyers.
Wait until the market corrects and we have some control. Right now the banks still control the market and are conducting a genocide on non-bank agents.
I’ll remember those prima-donnas that treated us like crap when they bring their offers to me.
Yes, that includes Ash… Realty here in San Diego
Hi Stan…thanks stopping by and for your comment. Yes..it’s really bad out there and I don’t see it getting any better with the plague of foreclosures coming to market over the next few months
We have finally closed on our home (short sale). After months and months of set backs we found a local news article that gave what I considered good advise. I took that advise and contacted the local congressmen’s office of that area. It didn’t take a week after that to schedule closing. At the closing table we we’re then informed that it wasn’t quite finished and we could sign and pay that day (cash buyer) and they would finish in a short period of time. I took a few moments to compose myself and told them, “I am going to get lunch and will return in an hour and if you don’t have everything finished in that time I am out of the deal PERIOD and I will expect reimbursement of my down payment ”
I left but didn’t get lunch and I sat outside in my vehicle to sort of regroup myself, within a half hour one came to car window and said they’d finished and we could sign, and it was done.
Hell of a way to buy something, but those are the facts. Who or whatever was to blame I have but only to speculate.
thank you for hearing me