Short Sale “Flip” Realtors

Short Sale ThiefHere we go again! Now before you decide to crucify me, read the entire blog. for my point. It seems that in every Bull or Bear Market in real estate, you can always count on a few things. In a Bear Market, you can always see the late-night infomercial’s of “get rich quick buying foreclosures” programs. In the 1980’s and 1990’s, it was Dave Del Dato, today, take your pick. Consumer: those guys get wealthy selling you DVD’s not buying foreclosures! Want to make money in real estate? Hire a reputable Realtor who knows the renovation game and who is experienced themself in that process. If 2005-2007 taught you anything, it should be that in real estate and the stock market speculation business, there are risks.

Now, here is what else you can depend on: Shady Realtors slithering out from their holes to “help you” get in front of the market. In 2005, how many Realtors did I see buying houses for $500,000 and then the lender giving them $200,000 on top of that to “renovate” the home (that never seemed to get renovated). They were driving new Ferrari’s and Lambo’s and when the market went belly up, they gave the houses back to the bank, but kept the cash. Sooner or later, when this market clears up, I’m certain jail will be in order for some of them.

Now the Short Sale scam artists. They show up with “I’ll negotiate the short sale for you” plan. You list your home with this Agent and a third party negotiates your sale. Say you owe $250,000 and this “negotiator” you hired gets an approval for a sale at $150,000 (and assume the market fell 50% to 60% in your area). Then, that Realtor puts in MLS that they have an approval for $175,000. Then Realtor B from 123 Realty brings an offer for $175,000. Well, the Realtor and his buddy just put $25,000 in their pocket EXTRA without trying to disclose too much to anyone about what is going on.

Nobody got hurt right? WRONG! First of all, in my opinion, it is unethical for a Realtor to be involved with this practice. For one thing, knowing you can sell for more and selling this lower offer to the bank while KNOWING you are going to flip this house for extra money is flat out misleading the banks. I don’t care what your personal opinion is about the banks and how they screw Realtors and cut our fees at the table and that government bailed them out. What is WRONG is WRONG and two or three wrongs by the bank does not give us the right to STEAL MONEY from anyone. The people getting SCREWED are the SELLERS who hired those agents under the pretense that they were being helped. The fact is, most Sellers will have a judgement put against them for the deficiency of the sale. So instead of the seller in this example getting $75,000 judgement against them, they will now have a $100,000 judgement against them. THEY HAVE TO PAY THAT MONEY BACK THAT THE REALTOR JUST STOLE FROM THE BANK.Sooner or later, the house of cards will come down again and close all the loopholes. But for now, those Realtors who participate in this type of sale should be ashamed of themself. Before you cry “Sour Grapes” because I am not making that money, I have closed 94 sides in 2010 and will close well over 100 transactions this year. I have been selling real estate for twenty years now and the REASON I have lasted this long is because I refuse to deal from the bottom of the deck and I refuse to screw the Sellers who hire me to get them out of the scenario that they are in. If that means I take a haircut at the closing table, I’ll take it. What I refuse to do is feed my greed at the expense of others while hiding under the “it’s legal” defense. It is NOT MORALLY correct and if those Agents would get off their lazy asses, they would be able to make a nice living as a Realtor ………………….. while genuinely helping people. There are no short cuts in real estate.

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