Is this Legal...Need advice (dual agency, fee, accepting, illegal)
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Perhaps. But even in CA there would be vast problems establishing agency. Don't hand people 800 in cash. Just not a wise thing to do in CA or elsewhere.
Ugh. Skip the boards, skip the lawyers, skip the courts. Find the cops. You've been duped. Call the cops, detail to them that you believe you were just victim of a local real estate scam and proceed to recount everything that you have to them so they can maybe help you.
At worst, they tell you it's a civil matter and THEN you go for small claims, assuming the dude hasn't disappeared by now.
I hope you've learned your lesson here. Do yourself a favor and get a buyer's agent and NEVER EVER USE OWNER FINANCING/RENT TO OWN. If you can't afford a traditional mortgage, don't buy the house.
Ugh. Skip the boards, skip the lawyers, skip the courts. Find the cops. You've been duped. Call the cops, detail to them that you believe you were just victim of a local real estate scam and proceed to recount everything that you have to them so they can maybe help you.
At worst, they tell you it's a civil matter and THEN you go for small claims, assuming the dude hasn't disappeared by now.
I hope you've learned your lesson here. Do yourself a favor and get a buyer's agent and NEVER EVER USE OWNER FINANCING/RENT TO OWN. If you can't afford a traditional mortgage, don't buy the house.
I have to disagree with the last one... Owner Financing is different from Rent to Own which tends to be very problematic.
I've bought several homes for owner financing for various reasons and all were a win/win.
Each was a sale with Title Insurance... a couple properties simply did not qualify for traditional lending due to condition... my last one was an elderly couple that listed their home and moving to a retirement home... I put down 50% and they carried the balance for 15 years... each month I drop off my check at the retirement home... they are pleased and so am I...
I have to disagree with the last one... Owner Financing is different from Rent to Own which tends to be very problematic.
I've bought several homes for owner financing for various reasons and all were a win/win.
Each was a sale with Title Insurance... a couple properties simply did not qualify for traditional lending due to condition... my last one was an elderly couple that listed their home and moving to a retirement home... I put down 50% and they carried the balance for 15 years... each month I drop off my check at the retirement home... they are pleased and so am I...
Sure, YMMV. Sadly, most inexperienced home buyers like the OP are simply going to fall victim to a scam instead of find something that might work out, like you've done so.
Are you sure??? (Are you perhaps confusing certain legal responsibilities with agency relationships?)
I find it very hard to believe that an established Seller's agent, with a fiduciary responsibility to the Seller, can automatically transform into a Buyer's agent (or a Dual Agent) merely upon accepting a deposit for the sale of the Seller's house--in any state.
I remain highly skeptical of your claim...but feel free to enlighten me.
Are you sure??? (Are you perhaps confusing certain legal responsibilities with agency relationships?)
I find it very hard to believe that an established Seller's agent, with a fiduciary responsibility to the Seller, can automatically transform into a Buyer's agent (or a Dual Agent) merely upon accepting a deposit for the sale of the Seller's house--in any state.
I remain highly skeptical of your claim...but feel free to enlighten me.
The argument here is that the agent accepted funds and is unwilling to return them to the buyer. He has no authority to do so. We do not know whether he has passed on the funds to the seller or not. If they have, the seller has no right to keep them. If the agent has not given the funds to the seller, then it goes as follows:
"10. Authority to Receive Deposits
The general rule is that when the scope of authority of a real estate broker has been limited to producing a buyer ready, able and willing to purchase the property upon terms prescribed by the broker's principal, the broker has no authority to accept a deposit from the buyer. Even when an agent has express authority to negotiate a sale of real property, this does not give him or her implied or ostensible authority to collect the purchase price. When an agent does so, the agent is acting as the agent for the buyer and not the seller.
.... In those cases where a down payment has been paid to the broker and not deposited in escrow, title to such payment vests in the seller when the seller accepts the purchase contract. Further, where an agreement for sale of real property provides that a deposit with the broker is to become a part of the down payment when the seller puts in escrow a deed evidencing good title, the deposit becomes the seller's property when the deed is put in escrow...
.... The rationale behind this rule is that money received by a broker as agent or subagent for the seller belongs to the seller when the offer has been accepted. The broker may not return the funds to the buyer without the consent of the seller."
The argument here is that the agent accepted funds and is unwilling to return them to the buyer. He has no authority to do so. We do not know whether he has passed on the funds to the seller or not. If they have, the seller has no right to keep them. If the agent has not given the funds to the seller, then it goes as follows:
"10. Authority to Receive Deposits
The general rule is that when the scope of authority of a real estate broker has been limited to producing a buyer ready, able and willing to purchase the property upon terms prescribed by the broker's principal, the broker has no authority to accept a deposit from the buyer. Even when an agent has express authority to negotiate a sale of real property, this does not give him or her implied or ostensible authority to collect the purchase price. When an agent does so, the agent is acting as the agent for the buyer and not the seller.
.... In those cases where a down payment has been paid to the broker and not deposited in escrow, title to such payment vests in the seller when the seller accepts the purchase contract. Further, where an agreement for sale of real property provides that a deposit with the broker is to become a part of the down payment when the seller puts in escrow a deed evidencing good title, the deposit becomes the seller's property when the deed is put in escrow...
.... The rationale behind this rule is that money received by a broker as agent or subagent for the seller belongs to the seller when the offer has been accepted. The broker may not return the funds to the buyer without the consent of the seller."
Thanks for the link. I'm not sure how authoritative that information is (and I don't have time to look into it further as I'm heading out of town very soon) but there certainly are a number of complications if it's accurate.
I've only had time to skim through the link provided, but the following appeared immediately after your citation:
"This general rule of law does not apply, however, where the broker actually had authority to receive a deposit on behalf of the seller. Virtually all listing agreement forms in use today give express authority to the broker to accept an earnest money deposit on behalf of the seller."
I have never encountered a situation where a Seller's agent was so limited in responsibilities as to create the situation you cite. Further, in this immediate situation, the real estate agent took the deposit without even having a written contract between the parties. Under what authority did he do so? And under what authority could he possibly have cause to keep it?
As to the potential of an agency relationship being established by virtue of accepting this (unauthorized) deposit, from the same document I note:
"Civil Code § 2079.17 requires that the agency relationship intended or any change in the agency relationship regarding the agents of either party to the transaction must be in writing and must be consented to by all principals."
I highly doubt that all parties consented to such a relationship, or whether either party now considers that the agent is now a Buyer's Agent or Dual Agent. So, yes, this does make for muddy waters.
So...I still disagree that accepting a deposit on behalf of the Seller by the Seller's agent would automatically make them an agent for the buyer, with full fiduciary responsibilities...but at least I know that you didn't just make it up. And I will grant you that agency relationships can be very complicated and confusing. Gotta run.
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