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REO Brokers "Pocketing" REO Listings Without Seller's Permission!!!

Over the weekend it was brought to my attention how a major REO broker seems to have an internal policy of putting REO listings in "Contingent" status as soon as they print the MLS printout to upload to RES.NET even though they don't have an executed contract. Had suspected as much but had not seen proof of it until recently. That is an unethical and probably illegal game some broker's play. Not only is it not fair to buyers agents and their clients but it may also limit the sales price the financial institution might receive for their assets. Has anyone else experienced that in their market and what have they done to curve such activity?

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We also experience this - listing is in active status however all offers are held until one of the listings agents "buyers agent" from their own team bring in an offer. This way the selling side commission is split. Not much has been done to curb the activity. You have to have proof to report to local association or DRE.
In this particular instance there is proof by way of a MLS printout showing he property in C status.
This is very common and has been for years. All you need to do is pull a history of these agents’ solds and look at the % they double end. There is very little that can be done about it. Most servicers don't care, they want the asset sold. When some agents get questioned about a specific property if a complaint is filed they always have an out. Their client placed the offer before anyone else. The local boards don't care at the end of the day.
I will do my best to make a difference to curve this unethical and unfair business practice. Agents can make a difference by bringing up the issue to their local associations. It's not right for agents who pay their dues and association fees to be excluded from having an opportunity for their clients to buy one of those properties.
There's one right now. Some REO agent is showing a house right in front of my in-laws. Nothing on the MLS, no sign, just a lockbox in the front gate. Today (per my in-laws) he was showing a house to some people and my father-in-law wanted to go look as well (a lookie-lou). He was denied acces because he didn't want to buy it. What a crock...err crook...
I know of one broker who will not be getting more assignments from a top 4 financial institution. The issue has been escalated to management and they support not doing business with unethical brokers. I am sure the other AMs are also being informed of this and they will start being more watchful of their brokers/agents business model. The word will spread to other AMs from other financial institutions and slowly but surely change will come.
I totally agree. I had an agent in my area make a comment to another agent in my office on a property that was pre listed.....he said there would be multiple offers on it and he would decide what offers would get submitted to the bank!! We have a slew of complaints at our local association on some of the REO agents practices. Thankfully, none of those complaints are about me!!
This is happening alot and I experience it every day in the field. Here is another new issue I have come across, Fannie Mae agents will not present an offer from an investor for 15 days from the date of listing. I was told it is a new law, but have yet been able to verify that law. I am an Agent for REO World and get very frustrated with the unethical practices that I see happening every day.
In my market this is common practice. On top of giving all their buyers the listings, they also get paid by the buyer for their service. This is not new and is almost an accepted evil. Even the smart buyers know. I had one buyer, who owns over 100 properties, call my about a property that was another agents in my office but they said they only wanted to deal with the listing agent because they knew that otherwise they didn't really stand a chance at getting it But as an agent I don't have the time to take this fight on. In my experience this is common practice for most of the bigger brokers. Myself, I have been offered cash on more than several occasions. Maybe it's because i'm fairly new and I don't want to risk any future business that I always turn them down. One thing that i'm guilty of is that I will try and find my own buyer during the pre-list stage but that buyer still has to be the highest or strongest offer. I really don't see anything wrong with that and I think that's the advantage you have as being the listing agent. I fell into REO's by luck but it was extremely hard work that got me up to 40 listings in a year. We have too much potential going forward to risk losing it all for a few extra dollars on one deal. I just really don't see a way to stop this from going on. WHo has the time and resources to end it? I would think only the banks do but they won't.

It is true, Fannie Mae, as part of the neighborhood stabilization act will look at only owner occupant offers for the first 15 days a property is on the market. They are aware of the investors buying everything up, and the 1st time buyers and others who might be willing to pay more are getting pushed aside because they don't have the cash. This is similar to what HUD dose for all their homes i belive is the website. Agents still should send your offer in, however this is the case. I got notification a few weeks ago. ( As you may or may not know, Fannie Mae is expemt from many local state contractual obligations, such as escrow, title, city and county transfer taxes, so it wouldn't suprise me if this new practice falls within the same guidelines.)

I like the idea of a set time period preference for owner occupant deals over investors. It gives the average home buyer time to take advantage of the deals out there. Then if no one takes the deal, open it up to everyone!
Carlos, it is sad but true. In my market the agent lists the property (sends to AM) then puts it on "temp" status so it is off the market. When you call to view, sorry the clean-out is not done, can't be shown. Then suddenly status goes from temp to Deposit. When sold the DOM will show the total, our system does not account for temp days off. They're always finding ways to beat the system including telling buyers "If you want to buy one of my listings, you HAVE to work with me" All of these things are hard to prove.


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