Short Sale Scams in the Dayton, OH area

There are so many home owners in financial distress in the Dayton and surrounding areas that it is just sad that this is even a problem…  Unfortunately as a short sale expert I have to see the effects of what being mislead can do to a seller in foreclosure.

What is a Short Sale Scam?

There are really two kinds of short sale scams in my opinion…

1. Short sale scams where the person taking advantage knows they are harming the home owner in distress or foreclosure.
2. Short sale scams where the person, usually a Realtor or real estate agent that is just in over their head.  They just don’t understand all that is involved in successfully completing a short sale transaction and all the steps necessary to get the bank/lender approval.
3. OK, I guess there are three kinds… short sale scam #3  The real estate agent (usually) has some experience and may be able to “fumble” their way through some short sale transactions but just don’t know enough to know when they are over their head OR even worse they KNOW but don’t tell the seller that they are in a short sale transaction that is beyond their expertise…

OK, Short Sale Scam #1

This can be the most harmful situation of all… taken to the extreme the home seller is cheated out of even more money and the home still ends up in foreclosure.  They home owner things they are paying to stop foreclosure and may just be being taken.   What are some of the scams I see…

• The pay up front and we will stop foreclosure scam.
• We have a lawyer and they can find a “problem” with the mortgage and get you out of this… just pay us now…
• We will take over your payments you just pay us rent… then they never pay anything…
• Sign over the deed to your property and we will negotiate with the bank… they have to have title if they are going to do all that work you know… yea right!  Well they don’t do anything and now the home owner is no longer the LEGAL owner… they can not do anything to stop the foreclosure and even if they do they don’t own the house any longer…
• There can be so many other scams… ASK A LOT OF QUESTIONS!!!

Short Sale Scam #2

This is one of the most frustrating for me as true real estate professional and someone that takes my profession and the necessary education very seriously.  I have spent thousands of dollars and weeks of time in education classes making sure I and my team have the knowledge necessary to take good care of our clients.

What happens when an agent tells a home owner in distress or foreclosure they can help when they really don’t know what they are doing it not only giving them false hope but they are also violating the Realtor code of ethics, if they are a Realtor.  The code of ethics says they we are Realtors should not practice in an area beyond our expertise.  Just as I will not sell a 40 story office building (while legally I am licensed to do so) they should not be doing short sales until they get the necessary training.  And, NO that does not mean taking a 3 hour class in their office or that they “did one” 3, 4 or 20 years ago… Things today are so dramatically different then they were even 3-4 years ago.  The mortgage crisis has banks utterly buried under mounds of short sale files…

Short Sale Scam #3

This is slightly different that #2 in that they may actually be able to handle some of the easier transactions.  Not that there are really ANY EASY transactions when it comes to short sales… but maybe then can do it if they only have a few listings and a lot of time to make mistakes.  This is not the agent I would want handling my serious financial problems.   Worse yet, since they “don’t know what they don’t know” they won’t really even know when they are in over their heads… What will they do with an FHA loan, what if the appraisal or BPO come in too high or too low… how about seller counseling?  Need to get a variance?  Can the buyer ask for closing costs, repairs, home warranty etc?  Do they have contact at banks and other institutions they can fall back on to answer questions and overcome problems???

How to avoid a Short Sale Scam…

My best advice is to call me directly or submit a form here on our site… If you are in the greater Dayton or Cincinnati area we may be able to help you directly.  If you are beyond our service area we will help locate a certified professional that can help you.

• The most impressive, ethical and through training would be the Certified Distressed Property Expert (CDPE).  Ask the person you are talking with if they have the certification.
• Ask them LOTS of questions…
• Ask them how may SHORT SALES they have CLOSED in the last 6 month.  Hint… if that number is 1 or 2 … keep looking.  A real specialist will be closing that many each month…
• Ask for references.
• Ask them what SPECIAL short sale specific forms they have had their attorney prepare to protect you and them as the process move along.
• Do they have a team to assist them?  If they work alone they will just not have the time to do all that is necessary to complete a short sale.

I hope this helps, please call me with any questions.