Got scammed by a BP member, what should I do?

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Got scammed by a BP member, what should I do?

S Shah
Member since 2019 · 7 posts · 0 votes

Hi

I'm a new investor in NC area. I posted that I'm looking for RE in NC in BP forums. A few people contacted me and started sending me emails about new properties. I recently liked one of them, went to see it with that guy (turned out that guy was a seller's agent). I liked the property and made an offer. He did not agree to have a buyer's agent and said that I would have to pay him myself if I wanted my agent in. I agreed and made an offer through him (seller's agent). My offer got accepted. He rushed me to make the wire transfer of $5000 down payment on property and sign the contract. It was a weekday noon. I made the wire transfer to his company and told him that I'm in meetings until 4 pm and I will review the contract document afterwards, sign and send it back. When I started reading the document, I found multiple things that were not communicated with me before, so I told him to add the addendums for the things we agreed on. He refused to do so stating that it is the standard state document. I told him, I need to review the document with my attorney before signing because he is lying and the format he sent me is not a standard state document, rather it was written for his company. As a reply, he said, he will go with another buyer and not me. I said ok, and asked him to return my deposit. He said ok. Its been a week now and he's not responding to my calls and text messages. I have not received my money back. 

My question is, should I contact an RE attorney and take legal action? What should be the next steps on my end to get my money back. It looks like a scam to me. Any help is appreciated.

Thanks

SS

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Dylan Craig
Real Estate Broker · Charlotte, NC · Member since 2015 · 8 posts · 11 votes
6y

@Joe Splitrock @S Shah As the BIC and General Manager here at New Western Charlotte, I wanted to make myself present in this thread. Only one user in our system matches the last name of Shah, so using an assumption here, there is no record of any down payment or monies being sent our way from that investor. With that said, if you feel like I am missing something here, please reach out. If this is concerning another office in our network, I am happy to get you connected with someone that can help there.

Thanks,

Dylan

------ Irrelevant comment---- Addressed before I sent------

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  • Alvin Uy
    Rental Property Investor · Los Angeles · Member since 2019 · 284 posts · 184 votes
    6y

    There was no mention of assignment fee on the contract nor did I even know what the amount was.   They had entered me a bidding war to get around this...and they used the C.A.R.  (California Association of Realtors) contract that clearly says my purchase price.  Easy to hide their margins when they did double escrows.  This also allows them to say that they are the "direct sellers" when clearly they are not...  only on paper as it turns out because of clever shuffling of cards.  Also, I had no control of escrows and title companies at the time... they did.  I did not know any better at the time as it was my first time dealing with wholesalers... nor did I know that double escrows is not always the normal practice with other wholesalers.  I was led to believe, that because they were also licensed REALTORS.  They had my best interest in mind.  I only found out months later once county records were mailed to me and there was a huge discrepancy.  Only then was I were able to put together what happened and how much the actual seller actually let the house go for.  Total scam in my opinion.  Ultimately, I was able to dispute it with county records because it clearly shows on my closing statement the correct amount of $$$ I had bought it for.   By the way, this issue with amount still pops in zillow and other online sources... so there's still several discrepancies floating around regarding actual purchase price.   

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  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    So Ryan, 'fess up, since you're arranging the sale of real estate in expectation of a fee - Do you even have a NC real estate license?

    You wholesalers have a real problem with disclosure and clarity don't you?

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  • Ryan Groff
    Raleigh, NC · Member since 2017 · 38 posts · 24 votes
    6y

    @Steve Morris Yes sir I am licensed in Texas, Florida, and North Carolina, although my Texas, and Florida are currently inactive as I am not practicing there currently. Everyone in my office is licensed as well. We also only market properties that we have under contract, and in addition close on every property with our own money as opposed to assigning. 


    We are very upfront with our process, and in fact require anyone that wants to receive our inventory to sign a non disclosure acknowledging the details of how we work, that we are licensed but do not represent them in an agency capacity, that they are encouraged to do their own due diligence, etc. In this case our meeting was not with Mr. Sha, but his partner, so there were some terms and processes lost in translation as they were past along.

    1Reply
  • S Shah
    OP
    Member since 2019 · 7 posts · 0 votes
    6y

    @Ryan Groff it's easy to get away by saying that the communication was lost. I met with the agent myself and communicated all along with him. The person you talked with yesterday was my husband and he only initiated the refund process. We were promised that we will get our deposit back right away, I still don't see any progress made there. I believe wire transfers are done the same day if you put it for same day, which is again a miscommunication on your part.

    @Alvin Uy I suspected very similar things and doing some back and forth with the agent, I was able to figure out multiple discrepancies in what was told and what was there in the contract. 

    I would like to thank all the BP members for their help. Your suggestions are very valuable and helped me navigate the issue much better. I appreciate the help this forum is providing to its members.

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  • Ryan Groff
    Raleigh, NC · Member since 2017 · 38 posts · 24 votes
    6y

    @S Shah The wire was initiated yesterday. I have been in consistent communication with your husband, and if it does not arrive today please let me know. Thanks.

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  • Charlie MacPherson
    China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    6y

    @S Shah Assuming that I understand this all correctly, one of the details that jumps out at me is that the agent pressured you into sending a $5,000 deposit BEFORE you had the opportunity to review the contract. That strikes me as a potential ethics violations If, in fact he is a Realtor (member of NAR).
     

    NAR members are subject to a Code of Ethics. Real estate agents who are not NAR members are not, but much of that COE is replicated in state consumer protection laws.
    It’s also a big mistake on your part.  A deposit for a property without a contract for it doesn’t tie the property up at all.  The only thing it does is weaken your negotiating position.

    I suspect that an attorney could use that to your advantage as there was no meeting of the minds, nor is there a contract in effect.

    One thing you might try is to send him a demand letter and have it served by a sheriff or constable, depending on how things are done in NC.  That way he can’t claim that he never received it.

    Likewise, he said he would refuse to work with a buyer's agent or split commissions with him. That's a violation of NAR's new (Jan 2020)"clear cooperation policy". Research demand letters to see what is required in them, or have an attorney write it for you.

    As others have suggested, I would be on the phone with his managing broker ASAP.  You might remind him that the real estate commission will take a dim view of brokerages that mishandle deposits.  I don’t know about NC, but in Mass and Maine where I’m licensed, that’s the fastest way to get your license yanked.

    If you don’t get very fast satisfaction from the broker, I’d contact an attorney and proceed from there.

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