Protecting myself with short sale investor in California…

[jenn_r]

I was approached by an investor yesterday. Here is the scenario they presented: This is an A-B-C deal format for short sale flip.

I would represent a short sale seller as listing agent. Investor submits offer/option contract, no contingencies. I would represent both parties (dual agency). Investor’s negotiator submits short sale package with offer and deals with lender’s loss mitigation. Property stays listed on MLS as active short sale. Lender accepts cash offer and schedules close date. Other offers that come in during the negotiation process are back ups because a contract was already accepted by seller. Seller/(Investor) accepts first back up offer and escrow is opened by buyer’s agent. Both closings occur within 30-90 days of each other (to allow for seasoning requirements, if necessary). Other facts:

Seller signs disclosure and affidavit that cash buyer is an investor and intends to sell quickly for profit.
Option contract discloses to the lender that the cash buyer is an investor and intends to sell quickly for profit within next 90 days.
Investor does not use funds from 2nd closing to fund first closing.
Commission to me would be paid twice – 2 separate transactions. Commission on the first A-B (whatever the bank reduces it to) and commission on the 2nd transaction B-C.
2 separate transactions – the first is non-arm’s length, the 2nd is retail arm’s length.

I haven’t agreed to work with them at this point. Any input on how I can best protect myself is truly appreciated! I’m not greedy, want to be completely ethical, and don’t really care about the double commission, only the listing side, and do want to help the original sellers move on with their lives.

[maryd]

I would first check to make sure you can accept one offer and still keep the property active in the MLS. I have always stayed away from the "double escrow" investor companies as they seem to throw a bunch of offers out there and see which ones stick