We currently have a home listed for sale. The homeowners have been relocated to a different state and the home is vacant. We received an excited phone call from the seller this afternoon. She had received a full-price offer on her property! Since we have an exclusive right to sell listing agreement, I was curious how someone got the offer to her directly, but an offer is an offer.
We had her fax it over to us to review. Rather than a contract to purchase, it truly was just the transmission of an offer. They were offering full price with a $10 earnest money deposit. Out of the norm, but it was a starting point. I was doing okay until I read the conditions:
"Seller agrees to leave the existing financing in-place and/or finance Buyer's assignee or successor buyer." This one should be a huge red flag for any seller. Basically, they will deed their property to a new owner but not pay off their mortgage. Wrap mortgages can be done in some states but most modern mortgages include a Due On Sale clause which states that the balance is due when the property is sold. Some of these companies will tell you that they bank will not exercise the Due On Sale clause but I've actually seen it happen when a buyer transferred his rental property into a Limited Liability Company.
"Sales price is contingent upon the condition of the property, the actual Fair Market Value, and current market conditions." While they're offering full-price, it can be adjusted later based upon a number of factors.
While I personally classify this as a scam, do yourself a favor and do not become involved in this type of "sale" without consulting with an attorney.
Tom Branch and Gina Branch, The Branch Team with RE/MAX Dallas Suburbs, service the greater North Dallas suburbs including Dallas, Plano, Allen, McKinney, Frisco, Lewisville, and Carrollton. While Gina concentrates on traditional listings and buyer/tenant representation, Tom specializes in assisting distressed homeowners to avoid foreclosure. Tom and Gina have published two books (Achieving Rock Star Status and The Field Guide to Short Sales) and are available for speaking engagements in the greater Dallas - Fort Worth Metroplex. Subscribe to The Branch Team Blog.
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