Wow, this one is a doozy. In all of my 10 years I have never seen anything like it.
Friday a client of mine discovered a property for sale that he has had his eye on for almost 4 years. Back then, it was listed for $300k as a short sale, and to be honest it may have worked for him at that price, although it wasn't worth it for him to go through the short sale process, only to be denied because he wanted to come in with a lowball number. Nevertheless, here we are 4 years later and it has finally run the foreclosure course and hit the market. I tried to get the lockbox code through our centralized showing system, but oddly I was directed to contact the agent. This is uncommon, but happens from time to time, so I called the agent, no answer, and then texted her. A minute later she responded with the LB code. I thanked her for the quick response, and told her my client will likely be interested so I asked her to give me a call when she had a chance. It's now listed at $225k. We spent, almost 2 hours touring the building, taking notes, discussing repairs, discussing the renovation plan etc etc. When we finished I immediately called the agent as they wanted to put an offer in. No answer. I sent another text letting her know my intentions in hopes she'd get back to me. When I got back to the office I pulled the property up on the MLS for the first time and everything appeared to be normal. At this point the only oddity we had noticed was that when it was listed on Zillow about 45 days ago at $150k, there was a price increase to $225k about 20 days later. Uncommon again, but Iv seen it before. As I start digging into the MLS and public records I find another MLS listing for the same property. In fact there were 3 total, the one from 4 years ago, the one listed for sale now, and a mysterious 3rd that was saying PENDING. My heart sunk into my stomach as I hate to find Pending listings on good opportunities, so I open it up and look around. First thing I notice is it's a carbon copy of the Active listing. The second thing I noticed was, my MLS shows the information for listing agents, and when properties go Pending or sold, they lost the buyers side agent information. I noticed the "Buyers" agent was the same agent as the "listing" agent on the New Active listing. Res flags and warning bells are going off now. I start lining up the dates. 4 days after the first listing goes Pending, the new listing is created. The seller is Hubzu, if anyone has any experience working with them, 100% chance that they do not close a deal in 4 days from execution of agreement. From this point I contact the original listing agent and inform her of what I found. Luckily she responds late on a Friday, but simply says that agent shouldn't be listing the property like that, and that she'd look into it Monday. At this point I'm pretty sure Iv solved the case. My guess is they are "wholesaling" this property, but what blew my mind was that they actually had the audacity to list it on the MLS. I sent a few more texts to the "new sellers" agent but was not able to get any answers. Later that night at 10pm I finally get a response. She replies, "it is for sale.... my partner is flipping the house....that is what you see a pending sale". Hmm. I reply "so they do actually own it then?" She replies Yes. I say that's weird, they should update the MLS, blah blah blah, and then she stops responding. Realizing what's happening I send a message to her saying my client is getting a little concerned with the shady ness of the deal, and that he's only willing to pay $150k, let me know if they'll accept that, otherwise we are just moving on." No answer. The next day I decide to research her brokerage, and broker of record. The office listed on the MLS doesn't exist. The broker of records cell phone number begins with (555). I was able to track down an 800 number that connected me to someone at charge in the office and I explained I had an interested buyer, couldn't get ahold of the agent to get answer and a seller disclosure which is required in my state, etc. He asked my to Text the address and agent info to him. He is a lot more responsive, although he isn't giving me any actual information. I continue to downplay my buyers interest, because at this point I'm going way far out of my way to track down this info, and I don't want to tip them off how interested my buyer is in this property, Incase they do not actually own it, and realize it's value and follow through with the sale. Finally, the broker or office manager responds to my text messages telling me " my buyer should probably move on to any property". I keep it cordial and inform him we kind of just want to get the story at this point, and he repsonds with "again, move on". So at this point I'm sure he got the story, and realized I'm on the them. What I'm not 100% sure of at this point is whether they actually settled or not. I'm praying that they have not, and that I can cut in and stop their attempt to flip the paper on this thing for $75k. I contact a title company because in this county they e-file title so the new owner would be recorded immediately. The title company informs me that the bank still owns the property. That's pretty much where we are now. What do I do? I NEED to stop their sale if it's still under contract. They are obviously intending on flipping it without making any repairs. My buyer intends on actually renovating and renting it out, and making the neighborhood a better place, faster, and not trying to make a quick buck. I'll admit we both dropped the ball not seeing the original listing 45 days ago. We have had our attention in 3 other deals and simply didn't have the time or resources to take on anymore. I know it's illegal to market properties on my MLS if your not the owner, my fear is that I can't stop their sale. Is the fact that attempted to flip it without owning it enough for the bank to cancel the contract with them? I am extremely scared of them actually closing on this deal, first of all it'll cost my buyer more money with zero benefit, but also now that I have basically pestered them the past 2 days, I'm afraid they either won't sell to us, or will just stand firm on a ridiculous price. Iv kept all of my communication professional, and like I said I have not indicated he'd be willing to pay much more than they paid, but if they had half a brain they'd be able to realize how high his interest is from how much we've been trying to get some answers. Anyone deal with this before? Any advice? Hoping to connect with the banks agent first thing tomorrow and lay out the facts, get them to cancel and slide in. I have a feeling it won't be that easy. All you "wholesalers" who see nothing wrong here need not reply, I don't need a debate about how many laws were broken here. To be clear, they were selling the house, not the contract. Looking forward to hearing what you veterans think.
