If this is legal, how would you be able to protect yourself from this investor taking the house?

Costs of taxes, insurance, repairs, servicing, legal fees all add up pretty darn quick.

Is that possible and legal?

From a legal perspective it would seem that the agency is charging a flat fee to "broker" the deal and that is their discretion to do so if they choose.

I've been emailing an attorney that was referred to me by a reputable investor in my area and was wondering if $500 for up to 4 hours of work is too much to be paying for his legal services?

i see Bill Bedor was scammed by BMRES in colorado and saw he was taking legal action...

It's awesome that you got the verbal offer accepted.Here is what I would do:Get the offer signed and throw in a token amount of earnest money to make it legal.

Our legal system at work.Tenants know this and take advantage of the system.

Legal fees.Accounting fees.Lost rent due to a lengthy eviction.Tenant damage above the security deposit.Utilities, at least when its vacant.Capital items (e.g., appliances, carpets, furnaces, roofs, etc.)Speaking of carpets, new carpets every 3-5 years.Property management.Make ready costs.

not legal advice because i'm not a lawyer but good luck in finding the broker whose going to put the legal monies behind an agent for you talking to their contracted client.