Peyton Conno…, Home Seller in Orange County, CA

Buyers given keys to our home without consent before the close of escrow!

Asked by Peyton Connoly, Orange County, CA Sun Jun 10, 2012

Our escrow has been delayed for numerous reasons (FHA loan, co-borrower switched jobs mid escrow which added an additional 30 days to our original escrow time frame). We have yet to receive a hard close date. We patiently waited and did not create any fuss. With dates constantly shifting and two young boys to care for, we thought it would be easier to pack things up and move in with family (in another city), so that we wouldn’t have to pack up the entire house in a day’s time. We did this, rented PODS, incurred extension charges because of escrow not closing for an additional 30 days due to her job change. Buyers asked my husband and I through Prudential documents if the buyers could rent our home until the close of escrow. In writing, we declined the rental agreement and buyers agent gave them the keys to our home anyway! Walked in to them "nesting" in our home! Everything down to spices was moved in. What is our recourse? Repercussions for buyers agent MLS violations?

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Peyton -

Bob is correct. Make sure that escrow is going to close, and when, first. Do everything you can to ensure it does close from your end. The alternative is far worse! Assuming it is going to close, get a rental agreement in writing ASAP. You need to deal with the "tenant issue" immediately.

I would also have the buyer remove ALL Contingencies and, Irrevokably and Immediately Release and PAY from escrow the entire Earnest Money Deposit to you now. If it's less than 3% of the sale price, make them increase the deposit to 3% and again release it all and have escrow pay it to you now. Of course this is in addition to paying monthly rent and a security deposit. Put all of the money into an account of yours and don't touch it until everything is resolved.

Make sure to keep your insurance in place - it is still your house and your lender expects you to have it covered. You may need to inform your insurance company you now have a tenant - that may increase your policy premium too.

I would also have a meeting with your agent and the Broker tomorrow to determine what happened and what they are going to do to resolve the situation should the sale be delayed longer, or if the sale does not close. If the sale cannot close (due to Buyer's issues) it will take you many months to get them out and you likely will not be able to market or show the property - and it is likely you will not collect any rent.

Best of luck and please come back to let us know the outcome....

Thom Colby
CA Broker
Newport Beach and Palm Desert
2 votes Thank Flag Link Sun Jun 10, 2012
Interesting dilemma, P.C..

MY first order of business would be to find out when the escrow is going to close, followed by doing everything in your power to make sure it does.

If it LOOKS like the escrow is indeed going to eventually close, then, I would revert back to the rental request you received, and if everything other than the occupancy - rental amount, utilities being in their name, insurance coverage, etc. - is acceptable, then sign it and make it effective the day it was offered, and at least collect some rent, and avoid some responsibility.

You can deal with the other agent - assuming that you can PROVE that they are the ones who gave the buyers the keys, later - in my humble opinion. Right now, THAT is the least of your problems.

I'm assuming that YOU have your own agent, although that wasn't mentioned, in your post.

What does your agent suggest?
2 votes Thank Flag Link Sun Jun 10, 2012
Yes, we have our own agent and they are of the position that we should allow them to move in before escrow closes even when all the realtor comments online I've read online regarding this issue state that very few sellers agents recommend this. Too much liability and things that can jeopardizing the deal. Buyers agent gave the potential buyers the keys with a tag attached saying, "keys for )_____" and a their names.
Flag Sun Jun 10, 2012
Steve, I was wrong about your comment - I didn't realize that Peyton had commented on my first post, about their own agent's apparent involvement. I'm not sure why Trulia doesn't make replies or comments visible, automatically? When I clicked on comments, I found Peyton's reply to me, about their own agent. I apologize for my remark, in my post to you.

Peyton? It is now Monday morning, and hopefully you can start to get a LOT of answers, especially from YOUR broker, including when your escrow is going to close. Good luck in sorting this mess out as quickly and painlessly as possible.
1 vote Thank Flag Link Mon Jun 11, 2012
Hi Bob,
I closed escrow on my home and have received the check and deposited it. I spoke with my agent about filing a complaint with the DRE about the buyers agent's illegal actions and he said he worked on the arbitration board for the DRE and nothing ever comes of those complaints. Why do our tax dollars pay for the DRE then!? I will send the complaint anyway along with a letter to her branch manager and corporate officers to let them know how they are being represented and let them decide how they want to handle it. At least it will be documented. Thanks so much for sending my your advice and thoughts.
Flag Thu Jun 14, 2012
Steve, I believe that you've misread the original post.

It was the BUYER'S agent who appears to have given the keys to the "buyer's".

As I stated earlier, however, the OP wasn't quite clear on that aspect of the situation.
1 vote Thank Flag Link Sun Jun 10, 2012
You can file a complaint with the local Realtor Board (if the person is a Realtor) and state licensing authority. You may also want to approach their Broker of record. That is such a an unprofessional and inappropriate thing for them to have done. I suppose you could also demand to be compensated by the buyer for the "rent" during this period. I would feel pretty outraged, personally.

I've had a similar thing happen when a property manager gave a tenant keys early. I was pretty furious. Handing over keys early IS a big deal and any real estate agent that doesn't understand that deserves to be called on the carpet and learn that lesson the hard way.
0 votes Thank Flag Link Sun Jun 17, 2012
Thanks Bob!

Peyton: aside from the mix-up of who supplied the keys, I still do believe you should seek a legal opinion on what your next steps should be.
0 votes Thank Flag Link Sun Jun 10, 2012
Thank you for your suggestion. When I arrived, there was no agent present and ALL of their possessions were in my home, including them. They had eaten there, had stated they had multiple people in the home to help them move. Beer bottles on the ground, food in the sink, dishes in the dishwasher. All of this after we declined their request for a rental agreement prior to close of escrow. We tried to be accommodating (bad choice) and we granted garage access which we believed would be granted via the buyer's agent via the lock box key. They would allow the buyers into the garage only, lock the interior door and go out the front door and our home to remained locked. We thought Prudential realtors would be reputable enough to be able to handle this on our behalf. We can't even wrap our brain around how someone could think this is o.k.
Flag Sun Jun 10, 2012

Wow, pretty bold unilateral move on the part of your Agent, which certainly comes with legal exposure to you, your Agent, and their Broker.

I believe many would agree your Agent does not appear to be working in your best interest when against your direction provides access to your home without your consent, nor with a contract that outlines responsibility for the following considerations (at a minimum):

1) The exact terms of possession
2) Compensation
3) Late charges
4) Responsibility for utilities
5) Entry rights
6) Responsibility for maintenance
7) Assignment/subletting
8) Responsibility for insurance
9) Any other special terms deemed necessary to compensate you.

Personally, I believe you should seek a legal opinion on what your next steps should be. Non-action on your part can be construed to mean acceptance of the current situation.

0 votes Thank Flag Link Sun Jun 10, 2012
I would suggest that you contact your CA. Association of Realtors or National Association Of Realtors and speak to them about what recourse you should take. There you will get the right answer for your state or be told where to get the answers you are seeking. Both of their contact info. should be on the internet. I know NAR is, not sure about Ca. Asscation of Realtors. I am truly sorry for your selling experience. I sincerely hope you get the answers you are seeking.
0 votes Thank Flag Link Sun Jun 10, 2012
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