Legal Question in Real Estate Law in California

Re: Using My Credit To Buy Real Estate

This is a pure scam. If you involve youself with this scheme, you risk losing not only your money, but your credit. I agree with the rest of the responses, RUN, don't walk away from this one. There are many, many other ways of making money without risking what you will risk with this scam.

Re: Using My Credit To Buy Real Estate

Ever heard the phrase "If it sounds too good to be true, it probably is"?

This is certainly applicable here. You are being scammed.

First, there's no limit on the number of homes an agent may buy, sell, or help buy or sell.

Second, to suggest that you partake in this scheme is to suggest a potential fraud. Why would you want to be a part of that?

Stay away from this. It doesn't pass the scratch and sniff test (it stinks).

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Re: Using My Credit To Buy Real Estate

This whole thing doesn't make any sense. I think you are being invited to be scammed.

In the first place, who would put a restriction on the number of deals an agent could close in a month? The Department of Real Estate doesn't. The only other possibility would be the agent's broker -- technically most agents are "salespersons" and need to work under a supervising broker -- but this makes no sense, since brokers' earnings result from commissions produced (and hence deals closed) by salespersons working for them.

Further, your question speaks of buying properties, but profits are made when the properties sell, not when they're bought.

Finally, licensed salespersons and brokers cannot put client money or deal money in their own accounts. That is a ground for loss of license. If a brokerage handles client money at all, it goes into a trust account, but it's much more usual and safer to use a licensed escrow company, which can also help to make sure that the paperwork and money flow is all on the up-and-up.

If you deal with this person, ask if you can discuss the proposed transaction with his broker first. The have anything you sign reviewed by an attorney. Insist that any money, and all documents, be processed by a licensed escrow holder. Finally, don't ever let any of your money be deposited into an agent, salesperson, or broker's personal or business account. Escrow or verified trust accounts only!

Re: Using My Credit To Buy Real Estate

Your skepticism is appropriate. I have seen this scheme recently and the result can be devastating to the buyer (you). Keep in mind that the agent would not have to use your credit if he were actually paying the full price on a house. Instead, what the agent does is take out a mortgage, in your name, hoping to resell the house quickly for a large profit. The problems arise when the house cannot be resold quickly, or for as much as expected. The result is that there is a loan in your name, and you are obligated on a monthly mortgage. If you can't make the payments and the house doesn't sell, your credit is ruined. The agent suffers no loss. Don't do it unless you take the precautions suggested by the other poster, and can comfortably afford to wait out this apparent lull in the market while waiting to resell. This scheme might have been successful during the last five years, but the market has changed considerably in just the last twelve months.