WHAT IS AN ARM'S LENGTH TRANSACTION AND WHY DO YOU HAVE TO PAY CLOSE ATTENTION TO THIS WHEN DOING A SHORT SALE?
Many agents are starting to learn that in order for them to stay in the real estate game they must start doing short sales. Since 2009, the Short Sale buzz has been something that real estate agents started to make a part of their marketing strategies because the traditional real estate marketing at fair market value does not exist anymore. Therefore, the foreclosure era has hurt the entire economy which lead to the banks having no other choice but to start coming up with other alternatives to re-coop some of their loses rather than letting a home go through to foreclosure.
As many agents start to work with the sellers and banks by completing short sale transactions, some agents have found themselves in hot water by not following the rules of the banks. Many banks require the transaction to t be arm’s length, which means that the parties are unaffiliated by family, marriage, or commercial enterprise. If you are a real estate agent in a transaction and you are made aware that this is not an arm’s length transaction you must not continue.