Legal Question in Real Estate Law in California
Because we were close to foreclosure, we spoke to a real estate agent to help perform a short sale. This agent had us sign our house over to a potential buyer that he knew. The buyer's offer was not accepted so he asked for at least two extentions to hold off the foreclosure. He continued to assure us, though, that he would still negotiate until he made a deal with them. We did not hear from either the mortgage company, agent, or buyer. I finally made a call to the mortgage company and found out that the buyer walked, leaving 1 day for foreclosure. The buyer never notified us that he was walking. We are now stuck with a foreclosure and a foreboding tax payment. Do we have any recourse to recoup the tax payment from the cold-footed buyer? Also, since the agent was not liscensed and continued to feed us false information and did not notify us that the buyer had walked until after the foreclosure date, can the agent be held accountable for the tax payment, as well?
3 Answers from Attorneys
Not sure what tax payment you are talking about. If the foreclosure is completed before the end of this year, the emergency exemption legislation against taxing the uncollected debt after foreclosures will protect you. As for the rest of this sorry story, I would say you have grounds to sue both the "agent" and the "buyer." You should also report the "agent" to the Dept. of Real Estate for criminal practicing as a real estate agent without a license.
I don't see the buyer having liability if the lender would not approve the short sale, based on the facts that you have provided. I do have a concern about what representations were made to your "agent" or to you about postponement of the trustee's sale, if at all, which is not clear from what you have posted.
You may have a fraud cause of action against this agent. As Mr. McCormick points out, the DRE may be concerned over your agent practicing without a license, but a criminal proceeding may not assist you monetarily, at least not unless the court issued a restitution order.
I suggest you have the matter reviewed as soon as possible by a competent attorney.
In any review process or subsequent legal action, you might want to investigate the Department of Real Estate's (DRE's) "victims of fraud" fund. I too don't see any culpability on the part of the buyer, or for that matter, the lender; but an unlicensed agent - uh oh.
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