...see add details 4 the question. A prospective client owns a for unit complex which is valued at approx. $1,200,000.00. She wants to list the property on a short sale basis for approx. $800,000.00. Once the property is listed she wants to sell the property to her brother. Once escrow closes her brother will then quitclaim the deed back to her. The reasons for her selling the property in this manner is not clear to her realtor but he takes the listing anyway. Has the realtor taken the listing with the potential of commiting an illegal real estate transaction?The property is in Southern California in LA county.A prospective client owns a four unit complex which is valued at approx. $1,200,000.00. She wants to list the property on a short sale basis for approx. $800,000.00. Once the property is listed she wants to sell the property to her brother. Once escrow closes her brother will then quitclaim the deed back to her. The reasons for her selling the property in this manner is not clear to her realtor but he takes the listing anyway.Has the realtor taken the listing with the potential of commiting an illegal real estate transaction?The property is in Southern California in LA county.

It is definitely against the natioal Association of REALTORS (NAR) code of ethics to do the transaction this way. All parties to the transaction should be informed as to the brokers relationship to the buyer or seller. Also, I think the IRS will question the disparity of the selling price and appraisal price.

If the real estate agent knows that this is what is going to happen, then yes.Only out of ignorance (and GROSS ignorance) can the agent get by with out a problem. However, this will be difficult as any agent's job is to get the most out of a sale. For the agent to list a property that far below market value and then to sell to a known relative... well.. they can't be that stupid. So it wouldn't be to difficult for someone (authorities) to prove the agent was in on the deal.Sounds like a deal I wouldn't want to be involved in!