Howdy Ags, my friend is in desperate need of some legal real estate advice. I'll try to explain the situation as clearly and concisely as possible:

My friend signed a contract with a realtor and listed her house for sale, with the sales price listed slightly below comp values at $220K. Four months went by, and it was clear that the realtor was not doing her job very well, if at all; there were no showings or anything done to promote the sale.

"Randomly", a gentleman contacted her out of the blue one day saying he was an investor, and was willing to buy the house for $182K. She ultimately signed another contract with the gentleman for him to buy the home.

The investor then had his own appraisal done (which she has not actually seen yet and is still waiting on), and is saying that there are tens of thousands of dollars needed to perform repairs per the audit's findings. Over the phone, the investor insisted that a short sale of the home would be the best option, because it would force the bank to make a quicker decision. Furthermore, he told her to quit paying her mortgage completely, and his lawyer would negotiate the sale of the house.

He also reassured her that performing a short sale would not impact her credit in the least, but now the bank is contacting her because she is two payments behind and is talking about foreclosure.

Can anyone shed some light of the legality of this? It seems like there was collusion between this investor and the real estate agent. Can she somehow get out of either of these contracts? How long can she go without paying on the mortgage? Her biggest worry right now is protecting her credit...

I really appreciate any help & advice you guys can offer!

Wtf is your friend thinking? The realtor has a fiduciary responsibility to the friend so if the realtor arranged a damaging deal you might have something, but the cost of this won't be cheap.

Get loan current and go from there.

What an unbelievable naive person.

If the investor wants thousands of dollars in work done, your friend can agree to do the work, can give price concessions, or tell the investor to pound sand and pay the price agreed. Why not take option 3, get caught up on mortgage, and find another buyer?

Your friend saved the money not spent on skipped mortgage payments, and can easily catch up, right?

bigcoop411 said:

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Howdy Ags, my friend is in desperate need of some legal real estate advice. I'll try to explain the situation as clearly and concisely as possible:

My friend signed a contract with a realtor and listed her house for sale, with the sales price listed slightly below comp values at $220K. Four months went by, and it was clear that the realtor was not doing her job very well, if at all; there were no showings or anything done to promote the sale.

"Randomly", a gentleman contacted her out of the blue one day saying he was an investor, and was willing to buy the house for $182K. She ultimately signed another contract with the gentleman for him to buy the home.

The investor then had his own appraisal done (which she has not actually seen yet and is still waiting on), and is saying that there are tens of thousands of dollars needed to perform repairs per the audit's findings. Over the phone, the investor insisted that a short sale of the home would be the best option, because it would force the bank to make a quicker decision. Furthermore, he told her to quit paying her mortgage completely, and his lawyer would negotiate the sale of the house.

He also reassured her that performing a short sale would not impact her credit in the least, but now the bank is contacting her because she is two payments behind and is talking about foreclosure.

Can anyone shed some light of the legality of this? It seems like there was collusion between this investor and the real estate agent. Can she somehow get out of either of these contracts? How long can she go without paying on the mortgage? Her biggest worry right now is protecting her credit...

I really appreciate any help & advice you guys can offer!

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Most important is for her to pay her mortgage payments. Otherwise, her credit rating would be shot.

If you don't mind us asking, which city is the property located in?

No legit investor would tell a seller to stop making their mortgage payment and suggest a short sale. Short sales are anything but a quick solution. They can take months upon months. Also, your friend would still owe commission per the listing agreement...doesn't matter where the buyer came from or who the buyer is. Friend put themself in a bad spot.

In case it's not obvious, your friend needs to call a lawyer.

It sounds like this has been going on for a while and your friend has lost thousands (if not tens of thousands) of dollars and ruined their credit. If there's a problem with a Realtor get a lawyer involved and the Realtor will probably opt out of the contract. The lawyer can figure out what to do/not do with the "investor" too

In

Update?

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a short sale of the home would be the best option, because it would force the bank to make a quicker decision.

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I don't understand this part at all. Why would "your friend's" bank need to make a decision on the sale of the house if it wasn't a short sale in the first place?

WTF....

Is this a true story? I say
1. get caught up on payments
2. Terminate the listing agreement with the Realtor.
3. Find a new and reputable Realtor

I think y'all are being overly critical of the Realtor.

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Four months went by, and it was clear that the realtor was not doing her job very well, if at all; there were no showings or anything done to promote the sale.

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Base on the number of holes in this story,and the naivete (stupidity) of the seller, who really knows if the Realtor was doing a good job marketing the property.

Wondering if she had a short sale with how much she dropped the price and the buyer said that a short sale would be more difficult if she was current vs in arrears? Either way, shouldn't have done it.

The original poster hasn't been heard from, looks like he flew the coop

FourAggies said:

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Wondering if she had a short sale with how much she dropped the price and the buyer said that a short sale would be more difficult if she was current vs in arrears? Either way, shouldn't have done it.

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or convinced her that she could negotiate paying the bank less than she owed if she stopped making payments for a while? Sounds like he was trying to get the bank to forclose, so he could come in and buy it from them for less

hot_rod_9384 said:

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FourAggies said:

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Wondering if she had a short sale with how much she dropped the price and the buyer said that a short sale would be more difficult if she was current vs in arrears? Either way, shouldn't have done it.

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or convinced her that she could negotiate paying the bank less than she owed if she stopped making payments for a while? Sounds like he was trying to get the bank to forclose, so he could come in and buy it from them for less

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Will be interesting to see if he is somehow associated with her realtor. There are a few realtors up here who are partners in LLCs that buy/"flip"/sell. The realtor will be horrible about showing a house, then their partner will make a low ball offer to the seller, who then accepts, because there hasnt been any interest according to the realtor, and the realtor makes money on the flip and sale. The key here is that the realtor never makes it known that they are a partner in the LLC that is making the offer, and never acknowledges a conflict.

That is exactly what it appears.

That seems unlikely. The realtor doesn't have that much control over who views the house. If they truly priced it "under the comps" then the property should have been getting showings. I just don't see how the agent would have prevented others from looking at the place.

It would also be pretty obvious when they ended up listing the property after the flip.

I'm not saying these kinds of things never happen, but it's not some pervasive issue. Juice isn't worth the squeeze.

The original scenario, as convoluted as it was presented, sounds like a naive seller who either didn't ask for advice from her agent (or received bad advice) and a crooked buyer.

This is most likely. There are a lot of really bad salespeople out there. My cousin just became a real estate salesperson, and I wouldn't trust her to sell a stick of gum on my behalf.