[ScoopLV]

Originally Posted by Datafeed

Is this legal?

Some short-sale home owners are requesting kick backs from buyers to get their offer accepted.

They do this in the form of "buying a couch" or "a tea pot" for 5k-10k.

I don't understand how "buying a 10K tea pot" is going to get the bank to accept the offer. I wouldn't bother just on principle. But this reminds me of the old eBay auctions where people sold a pencil for $100 that happened to include a bunch of copyright-infringed DVDs. Or where people sold a Cuban cigar box for $1,000, with the expectation that buyers were getting more than just the box.

It's sleazy, to be sure. And I would run from any such "deal."

[irishspy]

I just did a short sale and what happens in many cases the sellers list the properties for a certain amount. Then the fun begins first off my question is how was the buyer paying for the property. I did a cash sale. No bank on my part just the seller. What happens is the bank counters with their offer and price and this happens after the seller has accepted the buyers offer. This is when the process seems upside down. Many buyers assume the bank had given it's blessing back in the process when the first price was stated. In my case we offered $3,500.00 less than the original price the seller accepted. Then when the seller sent it to the bank they said no. We then offered the original listed price. The Title company and others did their thing. Close to the end of this process the bank then told the seller that they wanted another $3,500.00 from him. The seller and his lawyer then hashed it out with the bank BUT here is the kicker if they could not agree then the seller would ask the buyer to help make up the $3,500.00 difference. To our good fortune we did not have to do this. We only had $500.00 earnest money down at this point and would get that back if we rejected the offer. So reading the other post the sale of items at over inflated prices may be a way around the make up pricing. I do not know how this works if a conventional mortgage is being used. The real source of confusion is the bank and they just hang back during the process instead of being up front at the beginning. If you are doing a SS be prepared for a long process and some curve balls thrown your way. I did mine and I was living in NYS at the time so I had to deal with the issues by e-mail. Thank goodness I had a sharp Real Estate person who kept me calm and gave me good information not the usual BLAH! BLAH. The seller lived in Florida so I am sure they went through the same thing I did. SO overpriced sales of items is a legal cover to make up $$$ differences when the bank throws the screws into the deal.

[tbill618]

Originally Posted by ScoopLV

I don't understand how "buying a 10K tea pot" is going to get the bank to accept the offer. I wouldn't bother just on principle. But this reminds me of the old eBay auctions where people sold a pencil for $100 that happened to include a bunch of copyright-infringed DVDs. Or where people sold a Cuban cigar box for $1,000, with the expectation that buyers were getting more than just the box.

It's sleazy, to be sure. And I would run from any such "deal."

Why in the world would a buyer pay the seller anything? The seller has no control over what the bank does. I have contradictory information on whether the seller can back out of the SS. My realtor assures me we have a contract with the seller, some on this board think the seller can back out. I suppose if the seller and the bank come to some arrangement then the buyer is SOL.

But no where have I read or been told that the seller can speed up the process. Then can slow it down by not turning in paperwork but that would be at the beginning and if you have a seller like this then you should know in the first month and you should run away from that house.

Fortunately, we have good sellers, they hired a good law firm, and we are being patient. The only problem for us has been the bank- BoA - who is taking their sweet time and refusing to share any information with us.

[lvoc]

Originally Posted by tbill618

Why in the world would a buyer pay the seller anything? The seller has no control over what the bank does. I have contradictory information on whether the seller can back out of the SS. My realtor assures me we have a contract with the seller, some on this board think the seller can back out. I suppose if the seller and the bank come to some arrangement then the buyer is SOL.

But no where have I read or been told that the seller can speed up the process. Then can slow it down by not turning in paperwork but that would be at the beginning and if you have a seller like this then you should know in the first month and you should run away from that house.

Fortunately, we have good sellers, they hired a good law firm, and we are being patient. The only problem for us has been the bank- BoA - who is taking their sweet time and refusing to share any information with us.

Using the standard short sale addendum from GLVAR a buyer or seller can kill the deal upon the bank approving the sale. It is clear cut and explicit. If you don't use the GLVAR forms then the right to cancel is as stated in the contract or short sale addendum that is used.

It is reasonably common to list homes on short sales well below comps. So the bank may well request a higher price. This can come from the seller or more likely the buyer.

The seller can always remove various items from the sale in the sales contract. Quite legal - the bank can take exception but rarely does.

If, as is true at present, homes are up 4 or 5% during the short sale period the seller may attempt to secure part of this increase. And it may well be in the buyers best interest to pay the increase to the seller by buying something. Stranger things have happened.

One of the reasonably common things happening is the seller is asking the buyer to pay the law firm or negotiator of the short sale.

[WestieJeff]

In my experience, law firms tend to slow down short sales. Obviously every firm is different, but usually they are paid (mostly) a flat fee up front and never seem very "eager" to get a deal done.

An RE agent on the other hand, doesn't get paid until the deal is done.

Really, a short needs someone calling the bank roughly every other day and calling escalation numbers when things get hung up.

It all depends on the dynamic of the individual deal. The slowest deal I was ever involved in was with an RE firm that CLEARLY was not doing much. The listing agent wasn't doing anything to help the matter along either. It did close (surprised me), but it took over a year.

Originally Posted by tbill618

Fortunately, we have good sellers, they hired a good law firm, and we are being patient. The only problem for us has been the bank- BoA - who is taking their sweet time and refusing to share any information with us.

[buttercupp]

We looked at a short sale where the seller wanted $4k for the poly-shutters. That was one of the deal breakers, along with the large chunk of plaster missing from the jacuzzi and tiles falling off the pool.

[Datafeed]

Originally Posted by ScoopLV

I don't understand how "buying a 10K tea pot" is going to get the bank to accept the offer. I wouldn't bother just on principle. But this reminds me of the old eBay auctions where people sold a pencil for $100 that happened to include a bunch of copyright-infringed DVDs. Or where people sold a Cuban cigar box for $1,000, with the expectation that buyers were getting more than just the box.

It's sleazy, to be sure. And I would run from any such "deal."

Hi,

The seller often gets many offers. The seller selects and offer and then it goes to the bank for acceptance. Some short sales are pre-approved at a certain price so once the seller accepts it's just a matter of time until it's your's.

[Datafeed]

Originally Posted by tbill618

Why in the world would a buyer pay the seller anything? The seller has no control over what the bank does. I have contradictory information on whether the seller can back out of the SS. My realtor assures me we have a contract with the seller, some on this board think the seller can back out. I suppose if the seller and the bank come to some arrangement then the buyer is SOL.

But no where have I read or been told that the seller can speed up the process. Then can slow it down by not turning in paperwork but that would be at the beginning and if you have a seller like this then you should know in the first month and you should run away from that house.

Fortunately, we have good sellers, they hired a good law firm, and we are being patient. The only problem for us has been the bank- BoA - who is taking their sweet time and refusing to share any information with us.

yes, they can back out. My deal will fall through as the seller will opt for bankruptcy as opposed to a short-sale.

[nfapps]

Originally Posted by lvoc

Tricky -

Nothing prevents a side sale of personal property between the seller and the buyer.

Nothing personal, but I believe this to be wrong. I had a family member just purchase a short sale and I remember several documents needed to be signed attesting to such things as the buyer and seller did not know each other, have no other business or personal dealings (such as you mention), etc as well as clauses that the property could not be rented back to the seller etc, - a whole list of things to make sure the seller was not otherwise benefiting from the transaction.

That's not to say it never happens, just that there IS something to prevent it, and it appears would be grounds for the bank to deny approving the short.

[kimba01]

^The bank will never know.

This was the case in my MI short sale. My first buyer came in real low on price and the RE agent asked if he would pay for the appliances, on the side. He agreed, it was a cash deal. The bank took too long to answer, so the buyer walked. But, the RE agent didn't seem to think anything about asking for the extra money.