One of the key problems with a short sale is making sure the buyer is an unrelated party; “an arm’s length transaction”.
I’m aware of a property being offered as a short sale in SoCal where the agent is the wife of the owner, and she has been, uh, unhelpful to some prospective buyers. I just heard last night that the lender has reached a short sale agreement with a buyer who just happens to be a close friend of the agent. Why am I not surprised? Perhaps this is the best deal for the lender, but I have my doubts.
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The verbiage in the “Short Sale Agreement” between the mortgage lender, states specifically, the the seller, husband or wife, can not benefit. In the cases we have recently purchased, we the Cash Entity, can not know, can not be in business with and can not have discussed the future of the property with the current mortgage owner which a “Short Sale” is being granted to. This example you used above is “Illegal” and this RE Agent is in breach of the Code of Ethics for the RE Profession. Moe and readers, think Short Sale through, why would banks let homeowners short sale the property to themselves, for the expressed intention to not pay the amount owed on the current mortgage?
Short Sale is a Contract, if the Seller agrees to move on after the sell and agrees not to benefit from the sell, then they can not benefit, make money from it, get a kick back and the RE Professional can not be related in anyway.