Foreclosure in 90265>Question Details

Jrjan1, Home Buyer in 90265

I think my young son is getting the shaft from a realtor.

Asked by Jrjan1, 90265 Fri May 14, 2010

She asked for all the cash upon signing he paperwork on a foreclosed house, saying itwould close in 7-9 days. It has been over a month. The money is apparently in an escrow account. My son never mentioned giving her all the money, we thought he just gave her hand money. We convinced him to ask her about how much interest he is getting and she told him he isn't getting any! This has to be illegal! That money isn't in a mattress somewhere, and I feel she is delaying closing on the house because she thinks she is going to make interest on that money. What can we do?

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Oh, wow!

Run, don't walk to the escrow company where hopefull your son has opened escrow?

Do you have a copy of the purchase agreement?

Did you contact that realtor's broker to discuss your concerns?

This sounds more than fishy. Please contact your attorney right away.

Additionally, research this realtor's standing in the Department of Real EState's website. Is she even a realtor? http://www2.dre.ca.gov/PublicASP/pplinfo.asp

Good luck!
0 votes Thank Flag Link Fri May 14, 2010
Did the Realtor give you a copy of the purchase agreement signed by the seller? This is a fully executed offer, it should state who the escrow and title company is, I would contact the escrow company and ask to speak with their manager. You do not usually earn interest on your money when it is in escrow, an escrow company is just a neutral third party that handles all of the monies in the transaction until the property closes or the transaction is cancelled. This is normal in California. It sounds as if you are having some communication issues with your Realtor, try to work it out, if you can't, then ask to speak with their broker. Did your son give the agent actual cold hard cash? Whether it was or was a check, your Realtor should have given you a receipt. One other thing to consider, even though your son is buying cash and it can close in 7-9 days, you are working on the bank's time of the foreclosed home, sometimes they do take longer. The best bet is to try to have your realtor find out what is going on from the listing agent and ask them to provide copies of all of the things I listed above!

Good luck!
Heather Paul, Realtor
Coldwell Banker
(310)586-0364 or (424)625-1037
"Your Local Real Estate Expert"
heatherprealtor@gmail.com
0 votes Thank Flag Link Tue Mar 15, 2011
Here are some things you should find out, or prepare to have:

1. Copy of the purchase agreement --- was it accepted by the bank
2. Copy of the bank's amendment or other paperwork showing where to open escrow
3. Copy of the deposit receipt from the escrow company
4. Name of the realtor's broker --- or is the broker the realtor "helping" your son?

It is unusual to write a check payable to the realtor; instead, we instruct the buyer to write it payable to the title company. Generally, on foreclosed homes, the bank likes to use their own title company, and in return, they pay for the title insurance.

But in this case, your son gave hard cash? And you have a receipt but only from the agent?

If you do indeed have a copy of the accepted purchase agreement, then your next step is to get hold of the escrow officer to make sure the money given to the realtor was transferred into an escrow account. If that were the case, the escrow officer would also have provided a deposit receipt.

Was the property he is trying to buy listed on the MLS? IF so, and if you know another realtor in the area, have someone check the status of that listing, and who is the agent representing the buyer. If that listing is pending/sold by a different agent not related to this agent's company, then you can be sure that a fraud was committed. At this point, if no one from your realtor's office is responding to your inquiries about this escrow or proof that an escrow was opened, then engage an attorney to help you.

Good luck!
0 votes Thank Flag Link Tue May 18, 2010
Hello Jrjan1,

It's unusual that no escrow company is being used. If there is no escrow company, and the check has been cashed then the money must be held by the Broker in the Broker's Trust account. The Realtor must log this transaction in the Brokers Transaction Log & Record of all Trust Received the day the offer was written. If the Broker has authorized the release of any portion of these funds prior to close of escrow a detailed record must be kept of each transaction.

Page one of the purchase agreement is your initial receipt of deposit. It's good that a second receit was issued to you by your Real Estate company

With regards to the full amount of the purchase price coming with the offer. I can only speculate that the Agent was following the direction of their client. Has your son asked his Agent and Broker why the full purchase amount was requested with the initial offer to purchase? If so, what was their response?


As far as disclosing the amounts of the other offers. This is not unethical. However, some Brokers do not like their Agents to disclose this information and some seller's will ask their Agent's to not disclose this information to prospective Buyer's and their Agents. If your son feels that his Realtor is not being honest about other offers or any other aspect of this transaction then I recommend that your son speak directly with his Broker. If he still feels his best interests are not being protected then your son should speak with a licensed Real Estate Attorney right away. I hope this helps to answer your questions as to what your sons next step should be.

Matt
0 votes Thank Flag Link Tue May 18, 2010
The receipt just says the money was received by the Real Estate agency. There is apparently no escrow company. Why did she want the full amount of the purchase of the home? I've never heard of giving the full amount instead of just a couple thousand in hand money. She also told him what other people bid, so he would bid higher, which I think is also unethical. How do I know if what she said was really true and other people actually did bid that much, or it was just her way of getting more for the house?
0 votes Thank Flag Link Tue May 18, 2010
1) you don't usually earn interest in an escrow account
2) foreclosures can close in 7-9 days. i frequently close them in 3 days (of course, i buy off a different list than MLS) for my own investments.
3) if he wrote out the check to a reputable escrow company, it's 99.99% likely you're not getting the shaft. if he wrote it out direct to the broker, then that's just a terrible decision.
4) i don't know how many realtors delay closing on homes to make a fraction of interest. every broker/realtor i've ever encountered wanted to close in 3 minutes, let alone 30 days. there should be a reason that it's going so long - perhaps final approval from the REO? Outstanding paperwork/inspection? I'm putting my money on final approval from the REO.

In closing, contact escrow to make sure the $ is still in the account and ask the agent what the hold up is.

BTW, i rarely see interest bearing escrow accounts on home purchases.



Cheers,



Lou
0 votes Thank Flag Link Mon May 17, 2010
Jrjan have your son talk to the broker to see if the money was placed in escrow. On forclosed homes I have run into delays in closing because of title issues. In my area on of the counties is 3 months behind in filing sheriff deeds after the sale because of budgeting and the sheriff making a power play statement. In Ohio, I can not answer of California by state law escrow accounts are noninterest bearing.

By the way the longest delay that I have had in a transaction on a forclosed or lender owned property has been closing about 3 months after the initial contract date.
0 votes Thank Flag Link Sat May 15, 2010
Hi Jrjan1,

What is the reason the Realtor is giving for the delay in closing the escrow? Was your son able to complete all of his property inspections? Or was your son buying the house as is with no plans to complete any inspections on the home? Did your son receive copies of all the documents upon making the offer, in particular did he receive a copy of the purchase agreement? If so he has a receit from his Realtor for the monies submitted with his offer to purchase. Has your son spoken with his Broker regarding the escrow? These are my initial questions that would shed some light on the situation your son currently finds himself in.

With regards to the money your son gave as a deposit. Your son should have received a copy of a second receit from escrow once they received the check. Escrow controls the money, it must be held in their escrow account until the money is dispursed as per the contract at close of escrow. Your sons Broker & Realtor at this point have no control over this money, nor do they have access to the money. Unfortunately, California does not mandate that interest be paid on any monies that are deposited into escrow for the purpose of purchasing a home.

I recommend that your son speak with his Broker and Realtor right away. If your son does not feel his best interests are being taken care of then he should speak with a Licensed Real Estate Attorney . Best of luck!

Matt
0 votes Thank Flag Link Fri May 14, 2010
It's difficult to unravel situations that are offered second and third hand as the truth tends to stray away from reality.

If you suspect foul play, it may be helpful to initially contact the agent's broker for his/her input. They may be able to support your need to clearly understand these events. In the event, you are not satisfied consider seeking legal assistance.
0 votes Thank Flag Link Fri May 14, 2010
Not sure why someone would tell you that a foreclosure with close in 7 to 9 days. Never saw one close that soon even if the buyer was paying cash.

If you are referring to earnest money then it does need to be deposited into an account until the closing. Not all earnest money goes into an interest bearing account however. Most states have a dollar amount needed before being put into an interest bearing account.

You should probably contact the broker and get this cleared up so you know exactly what is going on.
0 votes Thank Flag Link Fri May 14, 2010
Contact the escrow company directly. Contact your lawyer immediately if she doesn't respond. Do you have copies of the contracts??
0 votes Thank Flag Link Fri May 14, 2010
Ask her to see the escrow deposit slip.
0 votes Thank Flag Link Fri May 14, 2010
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