Expert: Ray Beggs - 11/17/2007

Question
QUESTION: Hi Ray,
Thanks for doing this.  I am a 1st-time housebuyer who backed out of the deal after the inspection report showed many costly problems and safety issues.  Sneaky seller was my dual agent and had scheduled the inspection for the last day of the contingency period, so I sent in my own inspector the day before.  Now he won't release my escrow money because he says he made the special security improvements I asked for (window bars and some fencing at the back where there is a lot of graffiti) and he wants me to pay for them.  I never agreed to that.  What's the best way to go about getting my money back?

ANSWER: Hi Sasha,

I would write him a registered letter stating what you just told me and give him 7 days to return your deposit or you will take him to arbitration and report him to the Department of Real Estate for abusing his power as being the seller and dual agent and not abiding by his fiduciary responsibility to you as your sales agent.

If that doesn't work, consider taking him to arbitration and let a mediator decide.

Best of luck,

Ray

---------- FOLLOW-UP ----------

QUESTION: 1 problem:  Isn't arbitration expensive?  I mean, wouldn't I need a lawyer?  The escrow is only $3,000.  I think the seller is counting on that idea that I would spend more than that trying to get back the earnest money.  Should I therefore just consider the money lost, and take the arbitration as far as I can anyway, just on principle and to give him a record? Or will it not count unless there's a resolution?  How about Better Business Bureau?  I'll definitely go to DRE, though.  Thanks again!

Answer
Hi Sasha,

Arbitration here in California is approx $1000-$1500 and it's free to let the Department of Real Estate know what's going on. You know, I'm kind of a "principle of the thing" guy, so I would say that I would probably go for arbitration, but you have to decide for yourself. Who knows, maybe the mere mention of arbitration might get things going.

Best of luck,

Ray