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Originally Posted by GoldieMae

I'm not seeing the "fraud" part of this situation. I may be completely wrong. Can you let us know what part you think is a crime? Because if there is a crime being committed, that would be very useful information for the OP. I don't see a crime here. Short sales are legal. His using a broker is legal, etc. Am I missing something??

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The townhouse was advertised as FSBO. After he found a buyer the seller decided to bring in a realtor, who was a friend, and then admitted that this friend would collect the commission from the lender and then kick it back to the seller. That is an action that is intended to defraud the lender.

I am a recent homebuyer of a FSBO in the state of Virginia and the seller and I worked out a mutual sale 3% below the listed comps in the neighborhood. I would expect that the benefit to a FSBO sale is a little money in the pocket of both buyer and seller compared to having agents involved. However, your seller is intent on possibly other gains from this sale. You indicated he had other properties in the development and was hoping to make this sale to increase the valuation of his other properties. He is also linked with some other agent that he has confided in you will be involved in some sort of kickback that in the event this is a short sale involves milking extra money from some lender for his gain. I recommend, if you really want this place, in this case that you find an agent willing to represent you in light of all of these facts and make an offer. I would use all the contingencies you have in previous suggestions and any new ones you can think of to avoid being hung out by this nut.

truong, LisaB is a lawyer and a very fine one at that. Her advice is always spot on. I didn't want to scare you by outright stating that if you are aware of what this guy is up to you could get into trouble, basically for the reason LisaB brought up, it will be tough for them to prove. Your word against his. But, it doesn't mean that he won't do everything possible to hang you out to dry if/when he gets caught.

I know you love this house. As I said earlier, it will be your downfall if you aren't careful. You really need to stop for a moment and take under advisement what LisaB is stating here.

truong, I know that it is a matter of public record how much he actually paid for the townhouse but, how do you know what kind of loans this guy has on it? Is this what he has told you? How do you know how much money he has put into this property? Again, is this what this guy told you? The more information you are relaying the more nervous I am becoming for you. Honey, it can be the Taj Mahal, but I wouldn't have any dealings with this guy if HE paid ME to take it off his hands! You need to look at what the other properties are priced at and what they have sold for recently. His upgrades don't make a bit of difference to the basic value of the properly and you know that. Look at those websites that both Michael & I gave to you to get a good idea of what this property is worth.

P.S. BigCat has also brought up some valid points.

You did not mention if he is already listed with the agent. If it is , get your own agent, there is no cost for you and your agent will take care of the offer, title clearance, escrow, inspection, loan, advice you on the market value, etc. Again there is no cost for you. On a short pay, the seller does not accept the price, is the lender his agent has to deal with. Another question is what is the loan on this house? Is he trying to get more money then his loan? You should definitely get an agent to represent you.

There is no fraud. He can use anyone, a friend, an agent, or anyone to help him and he can pay them. Do not forget, on a short pay, he does not get any money from the lender, there are also tax implications he will have to deal with later.