The “Flipper” and the REALTOR®

 

The REALTOR® listed the sellers’ house and started working hard to sell it. Along comes the flipper and asks if he can buy it at a reduced price in a short sale. The REALTOR® writes the contract and submits it to the seller who signs it and then it is submitted to the lender for approval. While that approval is pending or even after it is approved, but prior to the closing, the flipper asks the REALTOR® if he will help him “re-sell” it to the ultimate purchaser. This should have been a bedtime story.

The REALTOR® forgot that he was hired by the seller to get the best price. In fact the seller was not fully aware of the dual listings and is now thinking that maybe the REALTOR® was not working for the seller’s best interests as it looks to the seller like the REALTOR® is in partnership with the flipper. In fact the showings to the potential ultimate purchasers are making the seller a little concerned. I mean after all it was the REALTOR® that convinced the seller to sell to the flipper. It was the REALTOR® that then helped the flipper re-sell it.

I hope that this little story helps clarify the issue. Yes, there is a different version that also might be told at a license revocation hearing. In essence the same story as above, except that the REALTOR®, working with the flipper, knows that the flipper is going to resell it prior to submitting the offer to the seller on the short sale. That’s right, the seller’s REALTOR® knows that the flipper is going to flip it prior to presenting the offer to the seller.

Would the story sound better if the seller were made aware of this system? Maybe, but what seller would understand this issue when it was presented by his trusted REALTOR®. That is to a seller in dire straights. No this is not dual agency, this is very dangerous. Don’t do it.

Disclaimer — Content is general information only. Information is not provided as advice for a specific matter, nor does its publication create an attorney-client relationship. Laws vary from one state to another. For legal advice on a specific matter, consult an attorney.

OLIVER E. FRASCONA