How Does This Remain Legal?

Let's talk about a home owner in distress. An investor comes along and gets the owner to agree to sell their house to the investor. The investor then opens negotiations with the bank. The "buyer" in the offer is one of the investor's employees. They don't use their company name as the buyer. The bank is then given the buyer's phone number, which is the company's phone number. When a Realtor is called out to do the BPO (broker price opinion), they are only allowed in the property escorted by yet another employee of this investor. The investor's employee then gives the Realtor a packet of information. This generally includes misleading comparable properties they want us to use as well as information regarding the offer on the table. It gets worse. I have even been given copies of letters from junior lien holders with the owner's account numbers.


While the investor is negotiating with the banks, they put the house in MLS at a much higher price. They market it with themselves as the seller. They are looking for an end buyer who will pay more.


They secure the buyer, and then they close escrow on the property. They are now officially the seller, though in MLS they were already representing that they were.


Here is a sticky point. Oregon law only allows Realtors to hold an earnest money check for three days. Prior to the investor taking title, the title company can't open an escrow file for it. They can't have two files open on the same house at the same time. So, they are unable to hold the check. We have checks sitting around for weeks at a time, waiting for a home.


I welcome your thoughts and opinions...