He wants to hook you up with the top agents in your area – AND only charge you a 2% commission.
They keep the 2% circle at the bottom of the advertisement for the entire 30 seconds to engrain in your head that they have some magic network of top agents who will work for the discount rate.
Don’t believe it.
The agreement they have with agents is that you will be presented with a 2% option, which is the typical For-Sale-By-Owner plan – if you find your own buyer, then the agent will handle your paperwork for 2%. At that point, you’ll probably wonder about the more traditional plans where your listing agent handles the whole process. The next thing you know, you’ll be signing the listing agreement at 6%.
Why will these listing agents insist on the more-expensive plan?
It’s because they have to pay a finder’s fee to the advertiser.
Whenever a corporate third-party is referring you to an agent, there is a fee paid by the agent – and it’s hefty. Whether it is a TV-advertiser, an internet pitch, or relocation company provided by your employer, they all take a big cut out of your agent’s commission – usually 25% to 30%.
The great listing agents – the ones you hope will sell your house for the most money – will pass along this finder’s fee to you. It means you’ll be presented with 6% or 7% options, and/or a commission that drastically discounts the buyer-agent’s side of the commission.
The agent-referral industry relies on the bait-and-switch.
If this guy said that he had the top agents in your area that charge 6%, would he get any calls? No.
The home-selling business is known for being the Wild, Wild West.
There are a few rules and ethics filed away in a drawer somewhere but there is no enforcement unless you do something really bad, like this guy – who only lost his real estate license a couple of months AFTER he was convicted and sentenced to three years in jail.
So when the Clear Cooperation Policy went into effect in May that stipulated an agent could input a listing into the MLS as ‘Coming Soon’, as long as they didn’t show it to anyone until it was marked as an active listing, many of us scoffed.
But apparently for our local association, this is the hill to die on:
During the short-sale era, agents defrauded banks out of millions of dollars, and all the association did was to produce a video of realtors talking about how to do short sales properly.
Bidding wars are regularly abused by listing agents who tilt the table in favor of themselves or a favored realtor, and the association doesn’t offer any solutions.
And the Clear Cooperation Policy still allows off-market listings to be sold within the same brokerage – and never offered to outside agents or the public.
There are plenty of more egregious violations of the consumers faith and trust, so why is the association selecting this rule to be the one to enforce, and issue heavy fines? They are dependent upon other agents ratting out the violators, so it’s not like there will be a MLS police, but will they start enforcing any other rules – and issuing heavy fines – while they are at it? The agents who get convicted of other violations only get a letter in their file for six months.
If agents want to show their Coming Soons, they can always join the San Diego Association of Realtors instead, where the fines are limited to $500. Or if the purpose of your Coming Soon is to test the market, just enter your new listing as Active instead and answer your phone for a couple of days and you will have ample evidence of how the market feels about it.
Here’s another tepid response to an issue that bugs consumers and agents alike:
A viewer’s comment on YouTube led me to this terrific inside view of the 2008 financial crisis, and the resulting impact on the world. It rightly blames the entire fiasco on the Tan Man, who pitched his mortgages to Wall Street based on the yields generated if borrowers made their full-interest payments, when in reality, only a much smaller minimum monthly payment was all that was due.
It’s eerie to watch today as our financial markets are in question again:
I make a quick comment in at the 2:38-minute mark, standing in front of the most-expensive REO listing we received in the era – a 2,900sf house in downtown Carlsbad that sold for $603,000 in December, 2009. It’s still owned by those buyers! The realtor.com estimate today is $973,900.
Barbara Corcoran said she lost nearly $400,000 after her financial team responded to an email that turned out to be a phishing scam.
“This morning I wired $388,000 into a false bank account in Asia,” Corcoran told ABC News.
Last week, the millionaire’s bookkeeper Christine received an email that appeared to be a routine message from Corcoran’s assistant Emily to approve a payment to a German company called FFH Concept. However, the email in question was never sent from Corcoran’s assistant, instead, it was sent from a con artist.
The bookkeeper at first questioned the payment and asked in her reply, “What is this? Need to know what account to pay out of.”
“Someone sends you a bill. It’s paid,” Corcoran said. “And this one instance, it was not a good strategy.”
The crook responded to the bookkeeper with a detailed explanation and as Corcoran said, $388,700.11 was then transferred.
After the fact, Corcoran’s team noticed a missing “O” in the “from” address
“When she showed me the emails that went back and forth with the false address, I realized immediately it’s something I would have fallen for if I had seen the emails,” Corcoran said.
The savvy “Shark Tank” star fell prey to an all too common phishing scam, which is something her fellow shark Robert Herjavec, who made his millions running a tech company, knows all too well.
“85% of all cybercrime across the world comes through email, which is what happened to Barbara,” Herjavec said. “This is very, very common. It’s been happening of businesses for two, three years now. It’s now happening to individuals.”
Herjavec said there are a couple quick best practices people can implement to ensure they don’t fall for this kind of deception.
“Always verify that the email is coming from somebody you trust. Get that person to call you,” he suggested. “Number two, check your bank statements every single day, because if you catch it within 48 hours, the bank can get it back for you.”
Unfortunately, the money in Corcoran’s case is already gone, but her team traced the original scam emails back to a Chinese IP address and her attorneys are reportedly figuring out next steps.
These are the crimes and attitude required to actually go to jail for real estate fraud:
A former Fannie Mae employee will spend more than the next six years in prison after being found guilty of accepting more than a million dollars in bribes and kickbacks in exchange for selling Fannie Mae-owned foreclosures for less than market value.
Back in January 2018, Shirene Hernandez was charged with accepting bribes for steering foreclosures to certain brokers and even allegedly buying some foreclosures herself at below market value. And nearly a year ago, Hernandez was found guilty of two wire fraud counts that involved the deprivation of honest services as a result of the scheme.
Hernandez formerly worked at Fannie Mae in California as an REO foreclosure specialist and was tasked with the sale of properties foreclosed on by Fannie Mae.
As a sales representative, a position she held from 2010 through 2015, Hernandez would assign Fannie Mae-owned properties to certain real estate brokers and approve sales of the properties based on offers the brokers submitted.
But, court documents showed that Hernandez demanded and received bribes – mostly in the form of cash – in exchange for brokers getting the listings and commissions those brokers earned on real estate sales in question.
Hernandez also approved sales of Fannie Mae REOs at discounted prices to both herself and to brokers who paid her kickbacks.
As part of the scheme, Hernandez also received bribes for approving below-market sale prices of Fannie Mae properties to the brokers, all of which were violations of Fannie Mae rules and federal law.
Hernandez also helped several family members become Fannie Mae-approved brokers, and then steered nearly $80 million in Fannie Mae listings to them, resulting in nearly $2 million in commissions in less than three years.
According to court documents, Hernandez received more than $1 million in benefits from the scheme, including cash kickbacks and equity in a Fannie Mae property she bought using said kickbacks.
And, according to court documents, Hernandez paid for that property using a duffle bag filled with $286,450 in cash, which she gave to her sister-in-law to bring to the closing.
“The crime that [Hernandez] committed was egregious,” the prosecutors wrote in their sentencing memorandum. “Rather than act in the public’s best interests…she used her position to line her own pockets. [She] is unremorseful and unrepentant, and would seemingly do it all again if she could avoid being caught.”
In addition to the 76-month prison sentence, Hernandez was also ordered her to pay $982,516 in restitution to Fannie Mae.
The most susceptible to home thievery are those properties that are paid off, and all you need is a crooked notary. This was more of a vengeful act by an ex-boyfriend that could be unwound a little easier because it had a mortgage and harder to re-sell. Hat tip to SM for sending!
Rohina Husseini had no idea someone could steal a house, but the first small clue that the home she owned for nearly a decade was no longer hers was a piece of junk mail that most of us ignore.
The Springfield, Virginia, mother said she initially tossed the mortgage refinancing offers that began arriving over the summer in the trash, but one detail bugged her: The letters were addressed to another woman. Curious, Husseini said she finally opened one.
“You bought a new house, congratulations,” read the letter addressed to Masooda Persia Hashimi.
“I was like, ‘Wow, this doesn’t seem right,’ ” Husseini said. “I don’t know this person at all. She never lived in my house even before [I moved in].”
In the frantic hours that followed, Husseini discovered the total stranger was now the legal owner of the brick Colonial worth about $525,000 that forms the center of her life with her husband and daughter.
The Securities and Exchange Commission today announced it has filed charges and obtained a consented-to asset freeze against San Diego-based ANI Development LLC, its principal, Gina Champion-Cain, and a relief defendant, for operating a multi-year $300 million scheme that defrauded approximately 50 retail investors.
According to the SEC’s complaint, beginning in 2012, defendants fraudulently raised hundreds of millions of dollars from investors by claiming to offer investors an opportunity to make short-term, high-interest loans to parties seeking to acquire California alcohol licenses. In truth, the SEC alleges, the investment opportunity was a sham. Contrary to defendants’ representations, the SEC asserts, defendants did not use investor funds to make loans to alcohol license applicants. Instead, Cain directed significant amounts of investor funds to a relief defendant that she controlled.
“The SEC took emergency action to stop what we allege is an egregious fraud,” said Los Angeles Regional Director Michele Wein Layne. “Importantly, the agreement we reached with the defendants to freeze their assets during the litigation will give investors the best chance to maximize their recovery going forward.”
The SEC’s complaint, filed in federal district court in San Diego on August 28, 2019, charges defendants with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933. Without admitting any violations of federal law, defendants have agreed to preliminary injunctions against violations of these provisions of the federal securities laws, asset freezes, and the appointment of a receiver over ANI and the relief defendant to marshal and preserve assets. The stipulated order is subject to court approval. The complaint seeks disgorgement of allegedly ill-gotten gains and prejudgment interest, monetary penalties, and permanent injunctions.
This scam is very real – confirm with escrow company before wiring funds.
A local family lost their entire life savings to scammers while they were in the process of buying a home after they unknowingly wired their money to a fraudulent escrow account.
Andrew Batson and Erika Urry were close to finally living in their dream home. The just needed to send their down payment. When Andrew received an email from the escrow company asking for a wire, he obliged.
“I did so that day thinking I was under pressure and we were supposed to close in that week,” said Andrew.
However, the next week, Andrew received a call from their real estate agent asking for the money because it was missing and was needed so they could close. It was at that moment when Andrew and Erika realized they had been scammed.
“I had to call Erika to let her know all the money was gone,” said Andrew.
It’s happening everywhere – hackers are stealing funds thought to be wired to escrow companies. It’s a real threat – be careful! Hat tip GW:
James and Candace Butcher were ready to finalize the purchase of their dream retirement home, and at closing time wired $272,000 from their bank following instructions they received by email.
Within hours, the money had vanished.
Unbeknownst to the Colorado couple, the email account for the real estate settlement company had been hacked, and fraudsters had altered the wiring instruction to make off with the hefty sum representing a big chunk of the Butchers’ life savings, according to a lawsuit filed in state court.
A report by the FBI’s Internet Crime Complaint Center said the number of victims of email fraud involving real estate transactions rose 1,110 percent between 2015 to 2017 and losses rose nearly 2,200 percent.
Nearly 10,000 people reported being victims of this kind of fraud in 2017 with losses over $56 million, the FBI report said.
The Butchers, forced to move into their son’s basement instead of their dream home, eventually reached a confidential settlement in a lawsuit against their real estate agent, bank and settlement company, according to their lawyer Ian Hicks.
The problem is growing as hackers take advantage of lax security in the chain of businesses involved in real estate and a potential for a large payoff.
“In these cases, the fraudster knows all of the particulars of the transaction, things that are completely confidential, things they should not know,” said Hicks, who is involved in more than a dozen similar cases across the United States.
Numerous cases have been filed in courts around the country seeking restitution from various parties. One couple in the US capital Washington claimed to have lost $1.5 million in a similar fraud scheme.
Real estate is just one segment of what the FBI calls “business email compromise” fraud which has resulted in some $12 billion in losses over the past five years. But for home buyers, the fraud can be particularly catastrophic.
“In these cases, the loss can be devastating and life-altering,” Hicks said.
Real estate transactions have become a lucrative target for hackers “because they handle a lot of money and because they have employees who are not the most technically savvy,” said Sherrod DeGrippo, director of threat research for the security firm Proofpoint.
Additionally, hackers often do their homework and “sometimes they know more about the business than the employees do,” she said.
Those with a paid-off home are only one signature away from losing it. This former attorney was convicted of a similar fraud, gets out of jail and does it again – but worse. Hat tip to daytrip for sending this in:
Authorities have charged a West Hills woman with perpetrating a real estate fraud scheme that netted her $2 million, primarily by duping numerous elderly property owners into transferring over their property titles.
Angela Fawn Wallace allegedly befriended the elderly victims — or found properties where the owners were deceased — then obtained the property titles, the Los Angeles County District Attorney’s Office said, according to KTLA. She then allegedly used those titles to secure herself loans.
Wallace faces 72 felony counts, including identity theft and forgery. She pleaded not guilty to the charges Thursday, and faces up to 40 years in prison if convicted on the top charges, KTLA reported.
Wallace’s alleged scheme lasted from June 2014 to January 2017, and involved four properties and two dozen victims including the property owners, estates, trusts and investment companies.
Wallace took out loans secured by the properties and in some cases sold them off to unknowing purchasers, then kept the proceeds. The district attorney said in one case she rented out several units of a multifamily building and kept the money herself instead of handing it to the estate of the deceased owner.
Wallace was previously convicted of forgery in 2003, and recording false documents in 2007.
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