The Nevada real estate market has arguably been hit the hardest in the last decade, with prices plunging steeply, and having difficulty recovering in recent years. After complaints about fishy and downright unethical business practices on the parts of real estate agents began to surface en masse, the Reno Gazette-Journal investigated what’s happening with home prices across the state. Finding a slew of legal loopholes and “lax oversight by financial institutions and the state,” journalist Jason Hidalgo exposes how distressed homeowners are “ending up as pawns in a short-sale flipping scheme.” Without representation by real estate attorneys in Las Vegas, many home buyers and sellers are taken advantage of to the tune of sizable profits and commissions for a few investors and real estate agents.
Hidalgo examines the issue in-depth in his article linked above, but the long and short of it is that real estate agencies are using the desperation of homeowners needing to get out from under their purchase (either ill-advised or gone south due to family emergencies or changing personal financial landscapes) to buy up properties are well below market value and then sell them to pre-selected investors at well above market value. And by acting in a “dual agency” capacity, or representing both buyer and seller in the transaction, the real estate agent banks big with double commission. Real estate attorneys in Las Vegas corroborate Hidalgo’s research, noting that the occurrence of “triple dipping,” or collecting commissions from seller, then buyer, then on the resale “flip”)– or even “quadruple dipping” is becoming common. And in the process, it’s the regular folk who get screwed.
While dual agency is not a problem in and of itself, it can be abused when the agent prearranges the deals to sell below and flip above market value, which is more and more common on short sales, in which homeowners need to sell fast. While agents and investors protest that these practices are legal in Nevada, the consumers are the ones putting pressure on agencies to change their ways. Buying or selling a home with the counsel real estate attorneys in Las Vegas can offer some personal protection from the shady practices, but the problem seems to be bigger even than that.
Consumer advocates “believe such behaviors are harming the area’s real estate market and its recovery.” Short-selling far below market value drags down average home prices, then flipping at higher prices add volatility to the market and property values. Meanwhile, “taxpayers…are on the hook for deficiencies that arise” from the market fluctuations. Real estate experts say that short sales often come at the expense of average homeowners who have less experience and understanding with the complex legalities of real estate transactions.
If it’s your first time buying or selling a home in Nevada, or you’re just wary about the process, it’s a good idea to look into hiring one of the real estate attorneys in Las Vegas who can represent your interests during a sale or purchase. And if you’re concerned about the housing market across the state, speak out about it, Hidalgo urges. “There is no law enforcement or industry watchdogs, so [these practices] run unabated.”