Expert: Sue Bernstein - 5/31/2006

Question
My husband and i were currently in the process of purchasing a home in california, unfortunately the real estate agent was not very good at his job.  We were never provided with copies of the documents that we signed, he always promised to give them to us the next time we met.  He also verbally promised us that our mortgage payment would be between $2,200 & $2,400, but never provided us with anything in writing, it was always verbal.  Finally when we were getting close to signing off the loan papers we told him that if he did not provide us first with an actual figure in writing we would not sign. Well after it seemed that he had no choice, he gave us a figure of $3,300 as a mortgage payment, something that we told him several times was out of our range.  Now he's blaming us for not going through with the purchase saying that we have not complied with our part.  He is now saying that the seller will take us to small claims court and keep our $2,000 deposit because we our backing out of the deal.  Also about a week before the initial closing of the deal, the seller had decided to back out, but soonafter decided to again sell, this also delayed the process another 2 weeks.  What are the consequences that we are facing for backing out of the deal? Do we lose all of our $2,000 deposit?  Can we do anything in regards to our agent and his part in giving us false information, although it was only verbal?

Answer
Ivonne,

I can only answer this as it pertains to California.  If you signed a removal of all contingencies you may have some of your deposit at risk.  If you never signed this you can back out at any time and get your full deposit back.  I would recommend that you call your agent's manager to discuss the problems you have had with him.  You absolutely should have been given copies of all paperwork and you may have some recourse by filing a complaint with his local board.  I would start with the manager.  Unless your real estate agent was also doing your loan you should have been dealing with 2 people and the loan agent should have been giving you the information regarding the loan.  You may have legitimate reasons to back out but someone has to review the file to determine that status.

I hope this helps and good luck.

Sue Bernstein