Investor · Middlesex, NJ · Member since 2016 · 16 posts · 4 votes
Hello,
I'm looking into a house in central NJ, it is a foreclosed home that was recently under contract but is now back on the market. The listing agent told my realtor that he does not have to disclose why the previous contract fell through. Is this accurate? Or is the listing agent doing something shady?
Investor · Conroe, TX · Member since 2013 · 30 posts · 8 votes
10y
I've just learned the hard way how ruthless the REO listing agents can be... The deal that I won (overpaid for) fell through with the people prior and now that I'm stuck with the property, I should have gotten out of it like those before me. Listing Agent was very adamant that she would not disclose anything about why the listing fell through or anything about the property because it's an "as is" sell and they don't have to.
Closer to the end, I contacted an agent that worked under the listing agent and pretended like it was interested in purchasing the property through him. Of course because she wanted to double dip, she disclosed more information to her teammate than she would for my realtor.
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
10y
I'm about to generalize, apologies in advance to anyone reading this that is the "exception that proves the rule."
Here is my generalization: "REO / short sale specialist" agents are on average waaaay more shady than "normal" agents, and I wouldn't trust one farther than I could throw her or him.
I'll give an extreme example I encountered:
Title clouded, unclear if bank actually had the right to foreclose to begin with. Does Grandma Smith still own this house? Unclear; she just might. But she isn't selling it, the bank is.
Listing agent "shops for clear title," basically opening pre-escrow with title company after title company until one didn't catch the bank's possible error and that ownership is unclear.
Listing agent puts in the contract that title must be ABC Title, non-negotiable. Provides buyer with clean preliminary title report from ABC Title.
Something smelled fishy, I don't recall what exactly tipped me off, but I called a few local title companies and discovered that pre-escrow had been opened with them revealing clearly clouded title.
So, yeah. Don't trust an REO agent farther than you can throw them.
There are risks in every deal. It is your job as a REI (IMHO) to suppress the risks best you can in every deal no matter how it is procured (Friend, REO, MLS and etc.) Some ways to do so are through inspections, contracts, Title insurance and etc. I have picked up many REO's after being put back on the market after another has walked away.
Investor · Middlesex, NJ · Member since 2016 · 16 posts · 4 votes
10y
Tom T. I have an agent. My agent contacted the listing agent and asked why the deal fell through. He would not disclose any info. know I will have to assess risks. I wanted to see if there was any laws for the listing agent not disclosing info about the property.
Investor · Conroe, TX · Member since 2013 · 30 posts · 8 votes
10y
I've just learned the hard way how ruthless the REO listing agents can be... The deal that I won (overpaid for) fell through with the people prior and now that I'm stuck with the property, I should have gotten out of it like those before me. Listing Agent was very adamant that she would not disclose anything about why the listing fell through or anything about the property because it's an "as is" sell and they don't have to.
Closer to the end, I contacted an agent that worked under the listing agent and pretended like it was interested in purchasing the property through him. Of course because she wanted to double dip, she disclosed more information to her teammate than she would for my realtor.
Real Estate Agent/Property Management · Houston, TX · Member since 2014 · 1k+ posts · 827 votes
10y
@Kory Lutes I'm sure most states have similar disclosure requirements. Here in Texas the seller is required to disclose any KNOWN material issues that may influence the buyer's decision.
If the buyer walked away because the inspection discovered an infestation of termites, that would be a material issue which should be disclosed to future buyers. If the deal fell through because the buyer couldn't get financing, or just changed his mind, that's not a material issue and wouldn't necessarily have to be disclosed. But it's kind of stupid to not disclose that information to a future potential buyer because it raises a lot of suspicions.
Frankly, I don't like dealing with foreclosures/short sales when looking for properties for my investor clients. It always ends with me getting jerked around. And I don't blame the agent for that. The culprit is more likely the bank.