Fraud

If it seems too good to be true, it probably is.  If it smells fishy, it's probably fish!  If you're wondering if it's a gimmick, it probably is!

What does this have to do with real estate?  The big "F" word.  Not that one, silly.  The "F" word being described here is fraud.  The Minnesota Department of Commerce, HUD (Housing and Urban Development) and other investigators have been in the St. Paul and Minneapolis area in the last few months investigating the "F" word. 

News articles have reported title company affiliates closing or being fined; the Minnesota Association of REALTORS®  Resource Update  published the testimony of Jill Lehn who participated in fraud and is now warning others not to follow her path to felony-hood; and various other news agencies have picked up the stories of fraud as well.

There really is no free lunch.  Someone has to pay.  As a result, if a lender, real estate agent, or anyone else comes to you with, "Boy, have I got a deal for you."  Check it out with a second opinion. 

A recent scenario was checked with me.  Mr. I Wanna Sell was approached by a lender with a deal.  The proposed buyer (lender knew someone) (first flag) would buy at an inflated price (more than being asked) (second flag), and the seller would refund the excess money after closing to the buyer.  All of this would be under the table (not disclosed) (third flag).  He was assured it was completely okay because it's done all the time.  Mr. I Wanna Sell thought it sounded too good to be true and asked for a second opinion.  My opinion:  If it's not disclosed on the settlement statement at closing and is "under the table", it's fraud!

Someone else may want to go the fraud route, but not me.  I like selling real estate and I want to keep on doing so!

Comments

[Bonnie Erickson]

Jackie, I had a buyer that wanted to do a cash back to a "construction company" which he formed. It smelled suspicious to me so I asked the powers that be. They said as long as it was on the signature page of the body of the purchase agreement (not an addendum that can be pulled), I would be covered. I did one transaction that way and he never came back to me because I wouldn't give out lock box combinations. My gut was right. He wasn't totally on the up and up.

[Jackie Colson-Miller]

Bonnie:

That scam hit our local market hard and a local ReMax broker finally figured out something was amiss when one of his agents was coming in with over 20 contracts at a time using the same lender and same title company..BUT...that was after she had already done over 40 such deals and the listing agents and sellers never turned her in. We have to keep this industry ethical and question any transaction that appears fraudulent! Good for you! www.RealEstateSizzle.com