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Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 33766
Experience:  15 years real estate, Realtor. Landlord 26 years
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I recently closed on a house where some work was still to be

Customer Question

I recently closed on a house where some work was still to be completed. In an agreement prior to closing $5000 was to be held back in a cashiers check made out buyer and held by Title company. Unbeknownst to anyone, the listing agent actually used a personal check and when work was not completed in a timely fashion, the check was release to buyer. However, the listing agent stopped payment on the check. It seems a branch of contact occurred initially and the actions of the listing agent were highly unethical and borderline fraudulent. Thoughts?
Submitted: 3 months ago.
Category: Real Estate Law
Expert:  Barrister replied 3 months ago.

Hello and welcome! My name is ***** ***** I am a licensed attorney who will try my very best to help with your situation or get you to someone who can. There may be a slight delay in my responses as I research statutes or ordinances and type out an answer or reply,but rest assured, I am working on your question.

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So did the buyer get the extra $5K since the repairs were not completed?

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Did the title company actually hold back $5K out of the closing proceeds to ensure the work got done?

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thanks

Barrister

Customer: replied 3 months ago.
Actually was given the $5000 check in sealed envelope from Title company. Title company did not hold money from closing proceeds but held check outside of escrow.
Expert:  Barrister replied 3 months ago.

Ok, that is a little unusual and I am not sure why the listing agent substituted a personal check in this situation or why the buyer would accept it..

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But if the listing agent cancelled the check, then the buyer would have legal grounds to come after both them and the seller for breach of contract if they never actually got the $5,000 that they were entitled to.

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This is something that could be reported to the state Real Estate Board as it is likely an ethical violation and a legal one for a personal check to be used instead of escrowing out funds from the closing proceeds to hold back until repairs were completed.

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AZ Dept of Real Estate

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thanks

Barrister

Customer: replied 3 months ago.
Would not have accepted a personal check. The listing agent did not disclose that information. Would not have closed on house if that information had been known.
Expert:  Barrister replied 3 months ago.

I agree completely and would suggest that the buyer file suit against seller for breach of contract as well as filing a formal complaint with the AZ Dept using the link above..

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thanks

Barrister

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