The Nevada Supreme Court affirmed on March 6 a lower court ruling against a Reno real estate broker for violations involving short sales.
Kyle Krch of Krch Realty was originally found in violation of the law in 2015 by the Nevada Real Estate Commission for failing to inform sellers he represented about his financial interest in their properties. The state action against Krch was triggered by a Reno Gazette-Journal investigation that found questionable short sale transactions by a number of real estate professionals in the area.
At the time, the commission fined Krch $102,000 and Krch agent Michael Harding $23,000 for multiple violations.
Krch and Harding contested the commission’s ruling and filed a petition for judicial review with the Second Judicial District Court. The District Court dismissed the petition in 2016, citing Nevada statute.
Krch and Harding then appealed their case to the Nevada Supreme Court in March 2016.
The transactions typically took advantage of distressed homeowners who were desperate to sell their homes by setting up sales with pre-arranged investors and shielding the transactions from the open market. This prevented sellers from getting fair market value for their house and allowed investors to buy the homes at much lower prices then flip them at the market rate for a profit. The real estate agents involved, meanwhile, pocketed multiple commissions by representing both parties in what is known as a “dual agency” transaction.
These guys are a couple of rats who deserve more than just a fine.
Read the whole story in the Gazette-Journal