AUSTIN, Texas — What began as an opportunity to sell unwanted property, allegedly became a financial loss for one consumer.
Better Business Bureau serving Central, Coastal, Southwest Texas and the Permian Basin is warning consumers looking to use escrow companies for real estate transactions after receiving a complaint from a consumer who lost thousands of dollars to an escrow business. The complainant, John Ellickson of Gig Harbor, Washington, alleged he used an escrow company’s services in order to complete the sale of his villa located in Mexico. However, the business never closed the transaction and pocketed $6,351 of Ellickson’s cash.
“I have no idea how they found me. I didn’t tell the owner of the resort I was selling my property,” Ellickson said.
A representative of another company emailed Ellickson a contract. He also asked for a copy of Ellickson’s driver’s license and passport to verify he owned the property. The representative then referred Ellickson to an escrow company, whom he was told would handle the closure of the sale.
“They gave me information for an escrow company that would transfer funds once the sale was complete,” Ellickson said. “I had to wire transfer $2,190 which I was told acted as a fee and would be reimbursed.”
The business told Ellickson the sale would be completed by Sept. 11. However, a couple days later the business asked for more money.
“They needed an additional $4,161 to pay for some taxes,” Ellickson said. “I wired the money, but I just assumed it was some real estate tax. All the documents looked real and I never questioned it.”
Since submitting the last payment, Ellickson hasn’t heard from the company since.
When looking to use an escrow company for a real estate sale, BBB advises you:
- Seek legal aid. Unless you know the laws regarding real estate transaction, it’s a good idea to seek legal counsel. This can ensure all parties are acting in a legal manner and all procedures are being followed. If you feel unsure about any step in the sale, you can consult with a lawyer who can advise you about additional steps to take.
- Beware of red flags. A business asking for upfront fees and fees related to taxes is a sign the company is not looking to close a transaction. Typically, an escrow company service fee will range from $300-$500, plus any additional third party fees. A business should not seek any fees until after the deal has been closed.
- Overseas sales can be tricky. Selling a timeshare or property from another country can be difficult. You’re dealing with foreign laws and jurisdiction outside of your state and the United States. Consult with a lawyer to see what your options are.
- Never give out your personal identification. Be careful if a business requests either a driver license or passport to verify who you are. Providing that information could result in someone stealing your identity.