Penny, please let me know how this ended up (if it is resolved)!

I am very pleased with the quality of answers you have received on this issue! That proves that many of our agents are doing this for the right reasons. I am not an attorney, but I am the President Elect of the Ada County Assn of Realtors and it is always dis concerning when I here of people potentially using their license for personal gain without disclosing it.

By Idaho law, there are a number of concerns here:
1) Agency = who did the Realtor claim to represent (the seller, the bank, you or duel agency)?
2) Did the broker's contract to the bank explain as required by law that they were in fact a licensed real estate Broker broker in the state of Idaho buying it and disclosing their intent?
3) There is no way around the "seasoning" requirements if you are getting a government backed loan on this house since the banks have gotten wise to this "simultaneous close" process in many cases.

If everything is above board and fully disclosed to all parties, there is nothing wrong with an investor (including the broker) buying the property for resale. If there are any breakdowns, the Broker will be held to a much higher standard than a regular investor or Realtor. If you can prove non disclosure or fraud, I encourage you to report this to the Idaho Real Estate Commission as a formal complaint however.

Again, I hope this was resolved to a mutually beneficial conclusion and not a breach of the Agent and Broker's duties to you!

Aaron is right on with his answer.

Penny,

It's very important that you have your new offer submitted to the seller. In Idaho, it's law that ALL offers are submitted to the seller up to the minute of closing. The problem here is that you're exactly right: They probably won't submit it to the bank.

Here's where I get a little annoyed.

1. The agent and the broker MIGHT be in on it together (who knows), but they are doing it by the book from what you've said. The 90 day period is required to season the title so that the bank doesn't get shafted. But guess what! If they don't submit your offer to the bank, and it could possibly net the bank more money, then yes, the bank IS possibly getting defrauded.

2. Most likely the seller isn't aware of the situation and is ultimately responsible for any 'deficiency' if the lender wanted to pursue it. If your offer is higher and it was to be submitted to the bank, the seller would have less potential deficiency exposure. Again I would doubt that the seller would be aware of that. In our industry that’s called disclosure and I am assuming, but I bet there is little of if going on. SAD.

Unfortunately for you, your offer did expire and regardless of your interest that you expressed, the contract was void. You should have signed an extension.

There are plenty of good deals out there and unless this is the best home on the planet, for the best price that meets ALL of your needs and wants, I’d keep looking and stay away from this broker and his agents.

Continue to focus on what’s important for you and your family and go there, anything else is a distraction and waste of time.

Penny,
The 90 day waiting period isn't a guideline of your lender, it's an FHA anti-flipping rule. It wouldn't matter what lender you were working with. As for the 'scheme', there is nothing illegal about what they are doing. It's debatable as to whether or not it's in the seller's best interest. If they get the purchase done on the front end, I would have to say it is.
The real issue here is, if you were that in love with the home you should have stayed in the sale. 90 days is not an inordinate amount of time on a short sale, it's the minimum in most cases.

The 90-day waiting period is what they call "seasoning the title"...it was put in place because there have been some instances where investors have placed offers on short sales, while using someone else's money...the problem with that is 1- it leaves the door wide open for questionable practices with negotiating a short sale 2- when a bank agrees to a deal they are agreeing to the deal with the person who placed the offer, not the other person who had the money.
What happened to you could have been questionable practice, or it could have been a series of circumstances that "just happened"..whatever the case may have been you should take a hard look at what happened with this deal and honestly ask yourself do you really want to pursue this house further.
I understand that you informed the listing agent you were still interested...it would have been nice if the listing agent had given you a chance to submit another offer.

We can understand your reservations and curiosity about the appropriateness of this arrangement but, as explained, see nothing glaring. You might want to consider running this past an attorney for their input.

It is always wise to shop around when seeking mortgate information. The more information you obtain the clearer your path becomes.

Good luck
The Eckler Team