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California law prevents a California real estate agent from representing buyer/investors in the case of purchasing a foreclosed property under certain circumstances. While we always recommend that to completely understand your rights as a foreclosure buyer, you should contact a local real estate lawyer, the following article explains the basics. The first thing you must realize is that in California, a real estate agent CANNOT represent a buyer who is an investor to purchase a foreclosure property if all of the following four statements are true:

• The home qualifies as the seller's personal residence.
• The property is a single family home or 2 to 4 units.
• A Notice of Default has been filed in the public records against the property.
• The investor buyer will not occupy the property.

Now, if any of those four statements are false, a California Realtor is allowed to represent the buyer. However, if a real estate agent is representing an investor, the agent is required to post a bond, and no such bond is available in the state of California. Therefore, pre-foreclosure investors in California must represent themselves.  Think that is a hairy situation?  Foreclosure investors are required to comply with the Home Equity Sales Act and sellers who are in foreclosure have the right to rescind (cancel) a transaction within five days. Investors must give the seller notice of that right, and provide them with a copy of the form that will let sellers cancel.   Failure to comply with the Home Equity Sales Act carries severe penalties, including a provision that gives the seller the right to cancel the sale up to two years after the sale to the investor has closed and get the property back.

Read also: California Foreclosure Laws