There's that offer clause again!

By
Real Estate Agent with Coastal Properties Group International

On Friday, an agent faxed over an offer on one of my listings - didn't call, didn't make any comments on the fax, but that's ok. No sellers' disclosure signed - guess they didn't check either the MLS or the property website to download that ahead of time.  No preapproval letter - that's not good.

Let's review it: Full price offer at $650,000 - that's nice! 95% financing - umm. Closing Oct 31 - ok. Typical 1.5% for repairs - ok. Inspection within 10 days - that's normal. What's that miniscule mark in a box? Oh, they want to choose the title company - well, we'll change that. Additional terms - seller to pay 3% of buyer's closing costs and/or prepaids. Well, still not a bad offer.

Which addendums are checked? assignment clause - inspections, assignment, and property disclosure statement.

  • "If Buyer is FOR ANY REASON unhappy with a condition of the Property...Buyer may cancel the contract. Well, it's a house built in 1974, so that's a walkaway for the buyer. 
  • Buyer may assign this Contract to TO BE DETERMINED and Buyer WILL BE released from the duty to perform this Contract.  OK, another walkaway.
  • Seller to provide Sellers Property Disclosure, etc.  As noted above, it was in the MLS, on the web, and copies at the property,  but OK - we'll provide it again.

Ah, ha!  Addendum Y. Additional Clauses (this wasn't checked on the contract, but here it is);

Seller to pay $90,000 to XXXX XXXX, LLC for repairs and/or improvements.

OK, ActiveRainers - do we walk away from this one, or RUN away from this one????

Sharon Simms, Real Estate Agent serving St. Petersburg, Florida, the Gulf Beaches and the Tampa Bay area.
 

Posted by

Sharon Simms
CIPS CRS CLHMS CRB RSPS
Coastal Properties Group
CHRISTIE'S International Real Estate
238 Beach Drive NE
St Petersburg, FL 33701
www.ssimms.com    www.coastalpgi.com   www.christiesrealestate.com
(727) 898-2582    Sharon@SimmsTeam.com

 

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Rainer
106,866
David Eiglarsh
Eiglarsh Realty - Weston, FL
CRS

I've seen quite a few of these offers in the past few months. RUN FROM THEM!  THEY ARE MORTGAGE FRAUD! The key element is that the buyer chooses the title company! What will happen is that the $90,000 won't show up on the HUD-1. If by chance it does (and they will insist that it will) they will have your client sign one closing statement and they will send a "forged" one to the bank.  What's really bad is that I tried to justify one of these to my listed client by saying "as long as it's on the closing statement we're ok".  Their attorney said get rid of the contract and the agent that presented it to you. I've now lost a listing (but I'll keep my license-A lesson learned)!  RUN RUN RUN!

October 01, 2006 07:55 AM #1
Rainmaker
1,085,678
Bryant Tutas
Bryant Tutas-Tutas Towne Realty, Inc - Poinciana, FL
Broker/REALTOR, Tutas Towne Realty, Inc

Sharon, sounds like fraud waiting to happen. Why not call the other Realtor as a courtesy and explain this to him/her. Maybe they are new and don't know.

Did you know these Title Companies will use 2 Huds? One for everyone to sign so they can show the 90k then another one to send back to the Lender not showing the 90k.

How about fax it over to the District Attorney and copy it back to the Realtor? I would call the other Realtor first though. scammers prey on new agents.

October 01, 2006 07:56 AM #2
Rainmaker
226,706
Craig Schiller
Baird & Warner - St. Charles, IL

Hey, I'm not even a Realtor and I can see the red flags.

There is a saying in Staging. "If you can smell it 'you won't sell it."  Well ,I guess you could apply that here, because boy does this deal reak!

October 01, 2006 08:17 AM #3
Anonymous
Anonymous
Anonymous

Someone has been speaking to a GURU and watching those Carlton Sheets videos again.

My bet is that the pre-approval letter has never been written because this guy has no money what so ever.

October 01, 2006 09:55 AM #4
Anonymous
Anonymous
Anonymous

Well...I guess that offer is someone's idea of "getting rich quick"....My first thought would be RUN. Rather loose a deal than a license.

It never ceases to amaze what people come up with.

October 01, 2006 10:47 AM #5
Rainmaker
591,126
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

sharon,

i am a guru and i total agree with richard kruse.

david eiglarsh said it best:

"run"

this is loan fraud, not marketing the addendum on the body of the offer can only be to avoid showing it to the lender.

sabrina is right you could loose your career with something like this. just because you don't represent the fraudulent buyer doesn't let you off because you should have known. that makes you a co-conspirator! a good lawyer might get you off but your career would be over.

the shame is that you would likely be charged and the guru wouldn't.

it's made all the more shameful because it could have been done right, but that would mean the guru would have had to teach real estate.

the responsibly is now on you to turn this buyers agent, and escrow agent in to the states attorney general and, not or, his board of realtors®.

bill

william j archambault jr

the real estate investment institute

http:reii.org

October 01, 2006 05:33 PM #6
Ambassador
325,870
Karen Hurst
STONEHURSTREALTY.COM - Warwick, RI
Rhode Island Waterfront!

Incredible, Sharon!

And a good reminder for those agents who don't read anything but the price and closing date!

October 01, 2006 07:40 PM #7
Rainmaker
166,492
Angus in Naperville IL
RE/MAX of Naperville - Naperville, IL

RUN! Absolutely fraud! And they are really looking for this stuff now. Life is too short to mess around with these kinds of deals...

Moo 

October 01, 2006 11:42 PM #8
Anonymous
Anonymous
Anonymous

Bill -

Please don't take my comment personally.  There are unfortunately a lot of coaches in my area that used to sell cars or something else and have no idea what they are doing.  I have all the respect in the world for people who are educating others.

I should not have made that a blanket statement. 

Rich

 

October 02, 2006 08:02 AM #9
Rainmaker
591,126
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

rich,

i agreed with you, i'm embarrassed not offended.

real estate, and that includes mortgage lending, are the essayist legal professions to get into, that puts the responicabiltys upon us to police our own. unfortunately it only happens in the worst cases.

this sad state of affairs is perpetuated by the shameful state of education with regards to real estate.

sharon now has a duty to all of us to report these people for if we don't police our own and stop this abuse we'll surely get more bad laws as congress and the states try to regulate what they don't understand.

bill

william j archambault jr

the real estate investment institute

http://www.reii.org

October 02, 2006 09:25 AM #10
Rainer
426,058
Maureen Francis & Dmitry Koublitsky
SKBK Sotheby's International Realty - Birmingham, MI
SKBK Sothebynulls - Metro Detroit
Well, it looks like everyone is in agreement. What did your clients decide to do?
October 03, 2006 05:02 AM #11
Rainmaker
605,739
Sharon Simms
Coastal Properties Group International - Saint Petersburg, FL
St. Pete FL - CRS CIPS CLHMS RSPS
Maureen - they declined the offer and did not counter.
October 03, 2006 05:34 AM #12
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Rainmaker
605,739

Sharon Simms

St. Pete FL - CRS CIPS CLHMS RSPS
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