Monday, July 30, 2007

Cash Back at Closing

I had a listing appointment today with a smart, experienced woman. Several years ago, she wanted to invest in real estate so an agent offered to "help" her by introducing her to an investor. I'm not sure how the whole scheme worked, but she overpaid for a house by about $125,000. The appraiser was in on it. The real estate agent must have been, too, because when the buyer said she was nervous about it the agent kept saying it would be okay.

A side note... when you work with a real estate agent, MAKE CERTAIN that your agent analyzes the market to see what the home is worth. Get your market comparables. If your agent doesn't provide this for you (and yes it's okay to ask), then your agent hasn't provided proper "care" for you and could get in deep doo-doo as a result.

So this agent introduced the buyer to a grifter. Somehow he walked away from the deal with a boat-load of cash. The only way anyone should ever walk away with money is if the seller agrees to pay the buyer for repairs outside of closing. Also, the seller's net profits are acceptable. Real estate agents will take checks back to their brokers, but the checks will be made in the name of the company - not the agent.

I'm writing this as a caution for everyone. If someone is involved in a real estate deal and stands to make a lot of money (and is not the seller or the agents collecting commission on behalf of their broker), then it smells bad. If it smells bad, it's probably not legal. I'm thinking my client's statute of limitations is up on this, but I did give her a name of a good real estate attorney. She's a very bright woman, so if she can be a victim of a scam, then anyone can. Be careful out there - there are some very bad people who want your money.


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