I also said that we would make a couple of calls and report the incident due to the unethical behavior of the seller and their agent. Here are the details that have transpired.

Last week we received two separate communications from the bank/lender. The first one stated:

“We can’t entertain an offer that the homeowner had not approved and presented to us. This sounds like a bad situation but from a short sale perspective there isn’t much I can do to change the realtor’s behavior, I would recommend reporting him to the Realtor Board”

And the second:

The subject property had been in the short sale process until 4/3/09, when the buyer walked and at that time the file was closed. Since that time the agent nor the buyer have called in or sent any new offers. Submission of the offers is at the discretion of the seller. The seller must accept the offer and sign the purchase agreement, and then submit it to “bank/lender” for approval. The “bank/lender” cannot direct certain offers to the listing agent. We tell the agents that they should bring us the best offer for submission (usually the strongest buyer with the highest offer). The “bank/lender” has no right to set terms on the sale of the property until it is submitted.”

“As far as the request for funds outside of escrow, this would violate our short sale approval letter (once received) and void the approval. Also this would allow the “bank/lender” to accelerate the foreclosure process and possibly call the note due. Not to mention criminal/ethical violations for fraud. The marketing of the property as an approved short sale is a problem we are seeing but “bank/lender” does not have the authority to regulate this practice. This would be an issue for the agent’s broker, the local board of realtors and the department of real estate.”

Also today I reached the broker of the other firm to report the actions of his agent. He assured me he would speak to him and call me back. About twenty minutes later the agent called me to inform me that there was no longer a seller’s contingency for remaining in the property after the close of escrow. To which I said “what about the $15,000 you were seeking outside of escrow”? He just told me we could see the propertyagain this week and submit another offer, to which I replied “our buyers have decided not to pursue the property”.

She found the perfect house. The only thing better than the house was the rent which seemed a bargain at only $1400/month. She replied to the email, informing the owner or what she thought was the owner of her intentions to see the property. A day or two later she received a reply. The response which seemed a little atypical, opened with the supposed owner telling her his age, that he is happily married and about his lovely wife. Now who wouldn’t want to rent from a guy like that? He even went on to say that he understood how things happen sometimes, so if you are a few days late on the rent, no problem. He currently lives in Greece, so the transaction would have to be consummated by mail. RED ALERT – if no one is available to meet you or the owner has not employed a management company or property manager, be very cautious. He went on to say that if you decide to ever visit Greece, despite the outcome of the house, he was there to help. What a guy!

Later that day another email was received from the purported owner of the house. It continued with further instructions. Since he was not there, he had made arrangements with a third party company to deliver the contract and the keys and that she would have a 5 day period to change her mind. After the intermediary received the rental check, the keys would be delivered.

Walks Like a Duck

Suspicions began to abound. A property profile was pulled on the subject property in order to determine who the real owner actually was. It did not match the name on the previous emails. The name of the actual owner was entered into a Google search. The results indicated that a property matching the same address was in fact for rent but quite a bit higher ($2000/month) than the rent indicated on the suspicious ad. A call was placed to the individual who had placed the correct ad. The property profile also indicated that he owned another property in the area.

Imagine his surprise when he was told his house was for rent by someone else. He said he had recently been to the property and had received some rental inquiries, but had not noticed any suspicious activity. Furthermore he was very thankful for the information alerting him to the potential problem.

Warning Signs

If you are looking to conduct business over the internet be cautious of the following:

1. Correspondence through email only – no phone numbers provided or lack of communication or direct responses to any of your questions
2. Below market pricing – someone committing fraud hopes to make a deal quickly and secure your money. Price is usually an incentive
3. Third party involvement – the lack of a face to face meeting and dealing through an intermediary may be a clue that someone is looking to cheat you
4. Overt generosity- con men may appear easy to do business with and may also make compelling offers of assistance or leniency

Before you send someone a check remember these two words, Buyer Beware. Great advice in today’s online marketplace.