Legal Question in Real Estate Law in California

You mean where else can you seek free legal advice.

You have entered into a binding contract with the lender [I assume} and the owner of the home. Unless the contract is unusal and gives them additional time to look for liens, the contract is binding as soon as all you signed [subject to some conditions tha normally ar designed to let only the buyer out of the contract]. The purpose of escrow is to inform the buyer if there are any liens not previously known about, the owner has actual, full, and unliened title to the property, gather together all the documents needed for a sale, and gt everyone tosign the papers. Escrow does not determine whether or not there is a contract, although it can turn up information that lets the Buyer out of the contract, but not the seller.

The only argument the seller can make is that he was mistaken as to what he was selling to you, but that is due to his fault in not checking for that new lien [why did he not know about it; did he just forget about it?]. I assume you are not represented by a real estate agent but the other side has one. Tell them you have been advised by an attorney that there is a binding contract and you could sue for specific peformance [the court orders the owner to turn over the property to you] and damages [the contract may have a clause giving attorney fees to the prevailing party in any suit as to the property. During the period before you get a court judgment, they have to keep on paying the taxes and johter expenses .

The lender can not sell the property to some one else because they do not own it .[Be sure the lien runs with the owner and is not on the property, because if it "runs" with the house you end up with it on the property]. Tell them they should bring you case decisions and code sections that uphold their position. Tellthey you call theri bluff.

Aside from these types of web sites, I do not know that there is any other place toget free legal advice. If you ar buying a house you probably have too much income to qualify for any of the low income legal programs. But what othrer legal advice do you need?

not proof read

I agree with Mr. Shers. Your first step should be to learn everything you can about the lien, including the amount, when and why it arose, when and whether it attached to the property, why there was no prior disclosure, whether it was picked up on title research the lender did, and so forth. Short-sale contracts are not standardized and there is no way short of reading the entire agreement to give you reliable advice, but certainly as a general rule an agreement for sale of a house that contemplates delivery of a grant deed at close of escrow would not allow the seller to ask for additional money to cover a new, or previously undisclosed, lien.

Also, there is a doctrine called "equitable conversion" which holds that there is both an legal title and a so-called "beneficial" or "equitable" ownership interest in real estate, and that upon execution of a contract of sale containing no unremoved conditions in favor of the seller, equitable ownership passes to the buyer, with the seller retaining "mere" legal title as security for the buyer's payment of the balance of the purchase price. I think that liens arising after equitable title passes attach to the unpaid purchase price, not the real property, and would not affect your legal or equitable title, but would be a lien only on the money received by the seller. See Riedy v. Collins (1933) 134 Cal.App. 713 at pp. 719-720.