Scammed by Investor San Diego

Member since 2019 · 3 posts · 1 vote

Looking for help with my situation.

I am selling my rental in San Diego and received all cash as is offer of $320,000 from investor/agent. We signed the purchase contract 7/11/2019 and scheduled to close on 9/3/2019 when the current tenant moves out. Escrow was opened with $1000 deposit. I was surprised to see my rental is now listed on mls for sale $359,000 and the buyer acting as my agent.

I feel I have been scammed. It looks like his intention was to purchase only if he found a buyer.

Now the buyer is telling me he is not going to complete the purchase. Contract states "PROPERTY TO BE SOLD AS-IS. ALL CASH OFFER". No contingencies. Can the buyer just cancel the purchase contract? Is there anything I can do?

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Cody L.

Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes

Originally posted by @Annie Park:

Looking for help with my situation.

You got "scammed" by a wholeseller. If you take away this topic, bigger pockets turns into a site with 4 posts a day. It's "illegal" (at minimum against the MLS rules) for them to list your property without a listing agreement. But yeah, they're trying to put properties under contract for $x, find a buyer for $x+$y, make $y on the double close. The fact they said "all cash" "no contingencies" is meaningless. They're not going to close. Take your $1000 and get a new renter in there.

If I was selling a house with a renter, I would ***NOT*** agree to remove the renter prior to closing unless I had hard earnest money of at least 5x the rent amount.

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Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
7y
You get to keep the deposit.
I am not a lawyer and I suggest you consult with one but the issue I see here are a lack of damages. Confirm with a lawyer who specializes in real estate.
If you had a large deposit on another place that required this place to sell then you would have damages.
Seeing the other party is a real estate agent, you may be able to file a complaint with the Department of Real Estate's Enforcement (http://www.dre.ca.gov/consumer...).
Besides being unscrupulous his actions pose a risk to the other party because the other party has no way of knowing or controlling the resulting damages, but in your case you did not indicate any damages.
Good luck
5 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
7y
@Annie Park I agree with Dan. Talk to your realtor and meanwhile, I'd report the buyer to the real estate board and their broker.
0 Reply
Nick Foster
Real Estate Broker · Carlsbad, CA · Member since 2017 · 70 posts · 63 votes
7y
@Annie Park, file a complaint with the CA Real Estate Board as mentioned above.
Lesson learned, do not allow your property to be tied up for a $1,000.00 deposit. If a buyer is serious, they should put down $10,000.00 or more (depending on purchase price and their financing).
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
clear violation and a written complaint with support documents to the real Estate commission is in order.
just a wholesaler .. doing what they do.. your remedies are your EM.. if they will sign the cancellation..
regardless I would certainly take the 10 minutes to file the complaint this is bad business.
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Cody L.
Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
7y
Originally posted by @Annie Park:
Looking for help with my situation.

I am selling my rental in San Diego and received all cash as is offer of $320,000 from investor/agent. We signed the purchase contract 7/11/2019 and scheduled to close on 9/3/2019 when the current tenant moves out. Escrow was opened with $1000 deposit. I was surprised to see my rental is now listed on mls for sale $359,000 and the buyer acting as my agent.

I feel I have been scammed. It looks like his intention was to purchase only if he found a buyer.

Now the buyer is telling me he is not going to complete the purchase. Contract states "PROPERTY TO BE SOLD AS-IS. ALL CASH OFFER". No contingencies. Can the buyer just cancel the purchase contract? Is there anything I can do?

You got "scammed" by a wholeseller. If you take away this topic, bigger pockets turns into a site with 4 posts a day. It's "illegal" (at minimum against the MLS rules) for them to list your property without a listing agreement. But yeah, they're trying to put properties under contract for $x, find a buyer for $x+$y, make $y on the double close. The fact they said "all cash" "no contingencies" is meaningless. They're not going to close. Take your $1000 and get a new renter in there.
If I was selling a house with a renter, I would ***NOT*** agree to remove the renter prior to closing unless I had hard earnest money of at least 5x the rent amount.

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Annie Park
OP
Member since 2019 · 3 posts · 1 vote
7y
It seems the Real Estate Purchase Contract is really worthless in this situation.
How do we get the $1000 from escrow?
0 Reply
Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
7y
@Annie Park No, the Purchase Contract itself is not worthless....the Terms in the contract ($1,000 EM) make it worthless.
Email the buyer/agent and notify them that since they didn’t close they need to send you the Cancelation and Release Of Em to the Seller form.
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Kenneth Donaghy
Real Estate Broker · San Diego, CA · Member since 2016 · 355 posts · 195 votes
7y
You will need to submit a Cancellation of Contract, Release of Deposit and Cancellation of Escrow . C.A.R form - CC
Mark the appropriate boxes, and sign and date on the appropriate lines
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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
7y
Your couple of posts here indicate maybe this is beong sold fsbo as opposed to being sold by an agent. Is that correct?
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Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
7y
@Annie Park Did you not extend the lease of your current tenant due to this being a condition imposed by the potential buyer? If so then you would have some damages for loss rent resulting from potential buyer not fulfilling his commitment to buy. This would likely fall into the amount appropriate for small claims court. I suggest you consult with an RE attorney but if this was damages as a result of potential buyer not fulfilling the contract then go to small claims court. I can be hard nose. Small claims court is not really worth my time, but someone screws me I feel that I want them to suffer as much as I can reasonably make them. It also may make the scumbag less likely to do this to someone else. Good luck
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Annie Park
OP
Member since 2019 · 3 posts · 1 vote
7y
Since I had an all cash offer, I did not have an agent. I did not have a listing agreement.
I was planning to sell when the tenant moved out and was not part of the condition of the purchase agreement.
I have contacted a lawyer and a real estate agent. MLS is still showing my property with 40 days on the market.
0 Reply
Pratik P.
Flipper/Rehabber · Sacramento, CA · Member since 2016 · 807 posts · 815 votes
7y
This happened recently with a seller I was working with. She tells me that she accepted a higher offer than mine and then I find the property listed on the MLS for 20k more than her contract. She was understandably shocked when I told her.
Like others have said, have the buyer release the EMD to you and also report this to the board. I don't think it's worth hiring an attorney for this.
1 Reply
Cody L.
Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
7y
Originally posted by @Dan H.:
@Annie Park Did you not extend the lease of your current tenant due to this being a condition imposed by the potential buyer? If so then you would have some damages for loss rent resulting from potential buyer not fulfilling his commitment to buy. This would likely fall into the amount appropriate for small claims court.

I suggest you consult with an RE attorney but if this was damages as a result of potential buyer not fulfilling the contract then go to small claims court. I can be hard nose. Small claims court is not really worth my time, but someone screws me I feel that I want them to suffer as much as I can reasonably make them. It also may make the scumbag less likely to do this to someone else.

Good luck

That's a tough one to win unless you want to take them to small claims just for spite. The EM is normally considered to be what the liquidated damages are from failing to complete the contract.
0 Reply
Tiffany Hoffman
Real Estate Agent · San Diego, CA · Member since 2016 · 52 posts · 29 votes
7y
Wow! Your first step is to report them to the local MLS so they can't do this again. There are specific rules regarding not having an actual listing agreement. Second, call your escrow company and see what your options are. Something to keep in mind moving forward, your ernest money deposit should be at least 2-3% of the purchase price. Curious as to where this property is, as I assume it's a condo?
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