Legal Question in Real Estate Law in California

False claim of seller home out of Escrow by Agent

The home I was attempting to purchase was listed on the MRMLS as ''fallin out of escrow and the sellers have packed, make offer.'' This was the home that I was seeking to purchase in the past but it was in escrow. We had found out through our agent that it was back on the market. My wife and I placed a bid on the home and it was countered by the sellers. The same day, we countered back with a full price offer and signed it. Due to the time constraints,I paid a 375.00 loan processing fee for finance approval. The next day as we were waiting for the deal, the listing agent stated that she had made a mistake and the house had never fallen out of escrow and the previous buyers were going to purchase the home. She was standing at the home smiling and thanking us for our bids and our agreement to counter with a full price bid. I've contacted her trying to gather facts and to see if they could compensate me the 375.00 for her lack of integrity and dealing with us as if the house was out of escrow, when if fact, it never was. What is the legal loop hole that these people can crawl into and do I have any grounds for negligence claims on the listing agent or the ability to get my money from the organization in small claims court?


Asked on 5/21/02, 2:39 am

1 Answer from Attorneys
Lubna Jahangiri Law Offices of Lubna K. Jahangiri

Re: False claim of seller home out of Escrow by Agent

The real estate agents are bound by the standard of good faith and fair dealing to third parties. If you think that the selling agent knew that the house was still in escrow then she may be liable for intentional misrepresentation or negative fraud (for not disclosing all facts). Listing or selling broker's duty is to disclose all facts that are known to him/her that are material to the transaction and one that the buyer does not or could not reasonably determine.

However, even if the selling broker/agent did not know that the house was still in escrow, and if you reasonably relied upon her representation that resulted in damages to you (in the amount of fee that you would not have paid otherwise) you should be able to get back your money.

NOTE: This communication is not intended as and should not be interpreted as legal advice. Rather, it is intended solely as a general discussion of legal principles. You should not rely on or take action based on this communication without first presenting ALL relevant details to a competent attorney in your jurisdiction and then receiving the attorney�s individualized advice for you. By reading the �Response� to your question or comment, you agree that the opinion expressed is not intended to, nor does it, create any attorney-client relationship, nor does it constitute legal advice to any person reviewing such information, nor will it be considered an attorney-client privileged communication. Pursuant to California Rules of Professional Conduct rule 1-400(d)(4), this communication is intended as a solicitation for legal services.

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Answered on 5/21/02, 2:39 pm


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