Legal Question in Real Estate Law in California

Re: deposit on purchasing a home

Avoid scams, deal locally.

If the deal goes south and he is out of state, you may have no effective legal recourse. This is especially true if he wants you to give the money to someone who is not a licensed escrow company.

Re: deposit on purchasing a home

Before you give any money to anyone, you need to enter into a WRITTEN purchase agreement with the seller that provides that your deposit is refundable if, for any reason, the transaction is terminated. Next, you need to have an escrow company handle the transaction and deposit your money with that escrow company. The purchase agreement is then made part of the escrow file and escrow instructions will be prepared based upon that agreement.

In my opinion, unless you seek the services of an attorney to prepare the agreement for you and monitor the escrow, obtain a preliminary title report and ultimately a policy of title insurance, and handle the transaction through escrow, you WILL enounter problems that will ultimately cost you far more than what it will cost you to use attorneys, title companies and escrow companies. If the seller is unwilling to go through an escrow company, you would probably be better off walking away from this deal.

Re: deposit on purchasing a home

Have a proper written sales contract. If you don't know how to do that, hire an attorney that does.

Re: deposit on purchasing a home

I don't mean to be repetitive, however, I am a real estate broker and attorney, and I can tell you first-hand that if you fail to obtain a properly written contract before turning any money over, you can kiss your $10,000 good bye. The money should not be held by the "representative" unless he or she is a licensed real estate broker, and is placing the money into a real estate trust account, or holding the check uncashed in a safe. Both are permissible, however, without a contract, its still not going to save your bacon on this deal. First, written contract prepared by a professional and reviewed by an attorney to be sure it has sufficient contingencies to allow you to back out without litigation; second, open an escrow with a licensed escrow company and deposit the money there; third, insist on a policy of title insurance at closing. Anything short of that, and you will lose your money guaranteed.

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