Buyer's Choice Act Is Signed
Sacramento, CA-Gov. Arnold Schwarzenegger has signed an assembly bill into law that protects consumers by ensuring that they have the right to choose their own real estate service providers when purchasing foreclosed properties.
Also known as the Buyer's Choice Act, the law prohibits sellers of REO properties from requiring the buyer to use a particular title company, escrow settlement or other real estate service provider.
The Escrow Institute of California says this "unethical, anti-competitive practice" drives up costs for homebuyers and takes business away from locally owned companies.
The institute said the problem has become particularly acute in the Central Valley and Inland Empire, areas that have faced some of the highest foreclosure rates in the country. Recent data indicate that the foreclosure rate in 11 of the nation's top 20 metropolitan areas is in California.
"Homebuyers should have every right to choose their title, escrow and real estate service providers based on price and quality of service," said Assembly member Cathleen Galgiani.
"This law ensures that buyers can make marketplace choices that suit their own best interests, rather than getting forced to serve the financial interests of some international bank or other corporation."
REO sellers must provide a disclosure notice to buyers informing them of their rights to choose their own title, escrow and other real estate services. Sellers who break the law are subject to civil penalties.