Preventing Short Sale Scams - KTVN Channel 2 - Reno Tahoe Sparks News, Weather, Video

Preventing Short Sale Scams

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Short sale is a common way many sellers are getting out from their underwater home, but it's an option that does come with some concerns. There are some practices out there that are not illegal but can be disconcerting. One of them is called dual agency. Dual agency is when the real estate agent represents both the buyer and seller of a home.

"It could be a bad thing if either of those parties best interests aren't represented," said Re/Max Realtor Michael Wood. "By definition, you have an inherent conflict of interest. You have a buyer who wants to pay as little as they possibly can for a home and a seller who should be wanting as much as they possibly can for a home and those two don't get along together."

For example, if the agent encourages the seller to sell the home lower than market value to give the buyer a bargain, while also having an agreement in place that allows the agent to represent the buyer again later on in a flip, then the agent cashes in on commission big time. Wood said because of these rare instances of fraud, dual agency is illegal in seven states. Nevada has not taken up the issue and made it illegal. Wood wants to make it clear, very few people have been victims of dual agency. He said sometimes dual agency is a great opportunity for everybody.

I asked Wood when can a seller be sure the agent has their best interest in mind. "Really the best way any type of seller, in particular, could keep their best interest at heart would be to make sure their agent exposes their home to the market."

You can watch the interview in its entirety on Face the State this Saturday at 3:30 p.m. and Sunday at 6:30 a.m. and 3:30 p.m.

Written by Chris Ciarlo

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