Posted by: Gay Potter | October 1, 2008

Real Estate Agent’s Commission Held Hostage!!! Bandit?????????…………….. 2nd Lien Holder!!!!!!!!

Top real estate agents in Phoenix, Arizona are being held hostage, well not the agent but their commission!   The real estate agent had searched the Phoenix market for the perfect property for their client.   imageNot so surprising,  it was a property that was offered for sale as a that caught their client’s eye.   Both buyer and seller agents worked the long and arduous process involved in a short sale.   Deal was struck with the first mortgage holder – YEAH!!!!   kept dragging their feet, at times not returning phone calls other times refusing to negotiate on the amount owed.   Time goes by, close of escrow date is nearing , finally the second lien holder agrees to settle for a lessor amount and release their lien on the property,  IF and ONLY IF, the real estate agents agree to kick back to the bank a percentage of their commission.  The unsuspecting victim is the real estate agent.  In order to close the deal,  agents are agreeing to these terms and cutting checks to the second lien holder outside the escrow for the property.   One agent checked with the broker before proceeding with this transaction and was told that unfortunately, this event is becoming common place in our market.

The bandit is unbelievably,  the second lien holder to the property.  The second lien holders have figured out a way to extort money from a property that they would not realize one cent from in the normal course of a foreclosed property.  This is just one agents reality of a short sale transaction.

I think we will see many more creative scenarios  ( a polite reference to extortion)from all parties involved as we move forward in this declining market.   Realtors who participate in this activity  are arming the 2nd lien holder to hold the next Realtor hostage.   Realtors…….this is outside the confines of the transaction – disclosure to all parties is required –  GET IT IN WRITITNG!!!!! Code of ethics?   Whaddaya say???????

 

   

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