The situation you describe nearly happened to one of my wife's co-workers. The realtor and seller initially misrepresented the size of the lot, stating that part of a common area was actually part of the seller's lot. To make things worse, the seller had torn down an old deck, and put a new, larger deck up, and it encroached upon the common area. When this was discovered, after a deposit into escrow was made, but before closing, (during the property appraisal) the buyer chose to void the contract, since the property was not represented correctly in the sale contract. A notice to void the sale contract should have released the escrow money, but it didn't. No refund was forthcoming. The realtor then offered to to keep "only" half the escrow money "for services rendered". The buyer eventually got it all ironed out, but this shows how unscrupulous some folks can be. The property owner ultimately had to tear down the deck and build a smaller one that did not encroach and did meet city setback requirements before the house could be put back up for sale. A little awareness goes a long ways!