Who pays when purchase funds go missing?

Law of the Land

In the case Johnson v. Schultz, et al., the Schultzes were in contract to purchase a home from the Johnsons for $277,500. The Schultzes hired a real estate attorney by the name of Parker to represent them in the transaction. Parker completed a number of tasks for the Schultzes, including completing a title search, procuring a policy of title insurance, preparing closing documents and a power of attorney, and actually performing the closing.

The Johnsons, who were familiar with Parker, paid him $125 to prepare the deed.

On Jan. 3, 2006, both parties attended the closing at Parker’s office, and the Schultzes’ mortgage lender, State Farm Bank, wired $200,320 into Parker’s trust account. The Schultzes used their personal monies to pay the remainder of the purchase price.