Other Ways that Comparable Solds are Created
and “certified appraisers” do not seem know.
Say a development, a bunch of lots has been listed awhile and a Seller wants to get a line of credit or really needs a high Selling price. The Seller will create a “fake sale” by getting someone Friend, Relative or Foe to buy a lot at a HIGH price to then be entered into the MLS and to create a Sold price that is way above average.
Say a development, a bunch of lots has been listed awhile and a Seller wants to get a line of credit or really needs a high Selling price. The Seller will create a “fake sale” by getting someone Friend, Relative or Foe to buy a lot at a HIGH price to then be entered into the MLS and to create a Sold price that is way above average.
Getting a couple of folks to do this will clinch the deal.
So how does this happen?
So how does this happen?
Well One way (there are many) is:
the Seller can walk in with say $35,000 hand it to the Potential Buyer
and say if you sign a contract for one of my lots ( say the lots need to sell for $60,000 – but currently they “comp out” at $30,000) for $60,000 – I give you this Cash, y
ou use it as a down payment for one of my lots, and then you pay off the $25,000 over 5 years, amortized at 30 years and you pay 5.5% interest.
Incentive for the Buyer, he gets to BUY a bit under market
Incentive for the Buyer, he gets to BUY a bit under market
($25,000)– not much but he gets it for no money down
and an awesome interest rate.
So they sign a contract, they close at the title company, title company sets up escrow, the Seller gets the $30,000 back… oh I mean as a Down Payment. And the Realtor enters the listing into the MLS for the Price it SOLD for and they NOW have a Comp for their other lots in that development.
If more comps are needed they can simply sell another one owner financing, maybe to a closer friend and they sell it for $2000 down, with a $62,000 SOLD price and they owner finance it. Same thing happens – title company closes the deal, the Realtor enters the SOLD price into the MLS and the Deal is done. It really does not even matter if the Seller ends up taking the property back for some reason. So no matter if the Buyer actually pays or not – in the long run. It is today’s SOLD that creates a Comparable Sold in the MLS database.
It sure does Look like an Arms Length transaction, I mean it was listed for quite a few months, it was exposed to the open market right.
Now say that this same Seller has several other development(s) in the area, some lots are in his kid’s name, some in his girlfriend’s name, some in the company name or LLC, some in the Girlfriends Kid’s names and some in his name.
And say this same Seller does the same thing all over again. This sure does Create a Strong “verification” for Value doesn’t it. It creates SOLID comps, the appraiser really has No Way of Knowing what has Really went down. Nor does the appraiser really know the “relationships” of the party. The Appraiser can argue this all they want but I am telling you the Truth. I know what goes on in the REAL world of Real Estate, appraisers that tell you I am lying or I don’t know simply are living in la la land.
Appraisers will tell you this won’t work… it Does… the Real Estate Industry has a WHOLE lot of room for corruption and the National Association of Realtors does NOTHING to provide Quality Control over the data in the MLS that is inputted by Realtors and or their staff. (Secret: in fact it was an NAR member and her boyfriend who offered me a similar proposal a few years back)
So they sign a contract, they close at the title company, title company sets up escrow, the Seller gets the $30,000 back… oh I mean as a Down Payment. And the Realtor enters the listing into the MLS for the Price it SOLD for and they NOW have a Comp for their other lots in that development.
If more comps are needed they can simply sell another one owner financing, maybe to a closer friend and they sell it for $2000 down, with a $62,000 SOLD price and they owner finance it. Same thing happens – title company closes the deal, the Realtor enters the SOLD price into the MLS and the Deal is done. It really does not even matter if the Seller ends up taking the property back for some reason. So no matter if the Buyer actually pays or not – in the long run. It is today’s SOLD that creates a Comparable Sold in the MLS database.
It sure does Look like an Arms Length transaction, I mean it was listed for quite a few months, it was exposed to the open market right.
Now say that this same Seller has several other development(s) in the area, some lots are in his kid’s name, some in his girlfriend’s name, some in the company name or LLC, some in the Girlfriends Kid’s names and some in his name.
And say this same Seller does the same thing all over again. This sure does Create a Strong “verification” for Value doesn’t it. It creates SOLID comps, the appraiser really has No Way of Knowing what has Really went down. Nor does the appraiser really know the “relationships” of the party. The Appraiser can argue this all they want but I am telling you the Truth. I know what goes on in the REAL world of Real Estate, appraisers that tell you I am lying or I don’t know simply are living in la la land.
Appraisers will tell you this won’t work… it Does… the Real Estate Industry has a WHOLE lot of room for corruption and the National Association of Realtors does NOTHING to provide Quality Control over the data in the MLS that is inputted by Realtors and or their staff. (Secret: in fact it was an NAR member and her boyfriend who offered me a similar proposal a few years back)
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