Reverse Staging: A new trick in short sale fraud
Staging a home for sale has become big business. Real estate agents know that presenting the home to appeal to the most buyers possible makes a huge difference in how quickly it will sell and can directly result in a higher sales price. …”staged” homes [can] sell in half the time, and for 17 percent more money.
But a new trend in staging has emerged with an entirely different goal. Reverse staging is designed to make a house look less valuable than it actually is. The goal is to accentuate the negative features of a home in order to change the perceived value of the property.
It involves a short sale where a Broker Price Opinion (BPO) is all that is required to determine the value of a property. It is often done by real estate agents or investors who are in collusion with a buyer who plans to then flip the house for a much higher price, said Ann Fulmer, Vice President of Industry Relations at Interthinx. Fulmer, an attorney, has represented lenders in mortgage fraud cases and prosecuted mortgage fraud as an assistant district attorney during her career.
It can involve anything from simply not fixing broken windows, or not taking care of the grass, to actually breaking things, or punching holes in the walls.