Active Rain May 29, 2009

Caution: Buyers Negotiating the Short Sale

I have been contacted by an investment group that showed interest in a short sale listing. They claim to be cash buyers, but have not shown proof of funds. They also want an incredible amount of information on the property and sellers so they can “evaluate” whether or not to go forward. I probably should have kicked them to the curb in the beginning, but thought it best to err on the side of giving them a chance to redeem themselves. 

After giving my agent a form to fill out on the property and mortgage, I contacted them and explained why we cannot disclose certain things. Moreover, I told her, we know nothing of your ability to perform. This went back and forth a few times via email, and the more I delved into it the more I knew my initial instincts were correct. They had their own team of “negotiators” to do the workout instead of myself and the seller’s attorney. After reading email replies with flowery wording reminiscent of the Nigerian Scam,  and dotted with terms like “full disclosure,” I told the seller to forget these people. He agreed. At best, these are well-meaning people who are amateurs trying to follow some bologna class or program they got into. At worst, they are con artists. 

I there are some scenarios where it might be OK for a buyer to be an authorized 3rd party to negotiate with the seller’s lender, but that should be done over extremely controlled circumstances and after enormous due diligence. The buyer might be a licensee with experience, an attorney with expertise in workouts, or some other credible scenario where checks and balances exist. It should not be granted lightly. In this case, where the buyer is shady, vague, and evasive, it should be avoided at all costs.