John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... 
Real estate attorney Oliver E. Frascona, advises listing brokers to remember who they are representing.
By Oliver E. Frascona
The Realtor® listing the house is working hard to sell it.
Along comes the flipper and asks the Realtor® if he can buy it at a reduced price in a short sale.
The Realtor® writes the contract and submits it to the seller who signs it. Then it is submitted to the lender for approval. While that approval is pending or even after it is approved, but prior to the closing, the flipper asks the Realtor® if he will help him “re-sell” it to the ultimate purchaser.
This should be a bedtime story.
The moral of the story is that the Realtor® forgot that he was hired by the seller to get the best price.
Indeed, the seller was not fully aware of the dual listings and is now thinking that maybe the Realtor® was not working for the seller’s best interests. It appears to the seller that the Realtor® is in partnership with the flipper. In fact, the showings to potential ultimate buyers are making the seller concerned.
After all, it was the Realtor® that convinced the seller to sell to the flipper. It was the Realtor® that then helped the flipper re-sell it.
I hope that this little story helps clarify the issue.
Yes, there is a different version that also might be told at a license revocation hearing.
In essence it is the same story, except this time the Realtor®, working with the flipper, knows that the flipper is going to resell it prior to submitting the offer to the seller on the short sale. That’s right, the seller’s Realtor® knows that the flipper is going to flip it prior to presenting the offer to the seller.
Would the story sound better if the seller were made aware of this system?
Maybe, but what seller would understand this issue when it was presented by his trusted Realtor®? Especially a seller in dire straights. This is not dual agency; this is very dangerous.
Don’t do it.
Oliver E. Frascona is a shareholder in Frascona, Joiner, Goodman and Greenstein, P.C., a Colorado law firm. His practice areas include Real Estate, Brokerage Law, Contracts, Finance, Land Use, Leasing, Real Estate Title, Business Law, Association Law, and Litigation. He can be reached at oliver@frascona.com.
Lenders are also requiring all parties, including both brokers to sign an Arm’s Length agreement. Guess too many agents have been acting poorly in the short sale universe.
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Perhaps the Realtor is working for a "short sale option buyer" instead of a flipper, thereby placing himself in conflict not only with the seller, but also with the sellers lender with regard to failing to gain the highest price available for the property.
Thanks for sharing. Always look forward to your posts.
D. West Davies
Jim Smith Realty
Pagosa Springs, CO