Are you a California resident who’s on the fence for selling a house? When it comes to selling your home, it can be difficult. First of all, it’s the place where you have established many memories and can be an emotional process to part ways with. Along with emotional attachment, there are specific laws you need to be familiar with, especially in California. Selling a house in California is a lot different than it is in other states. Here are the laws you’ll need to know before selling a home.
Disclosure of Facts that Affect the Desirability of Property
When it comes to selling a house California, it is required by law to make potential buyers aware in writing of any major problems that can affect the buyer’s potential to purchase.
Details that need to be disclosed are the following, but not limited to:
- Property walls
- Home foundation
- Electrical systems
A disclosure form called the Transfer Disclosure Statement is a document where you can list these items. If you are not sure about what things should be on the form, you need to discuss this with a trusted lawyer who specializes in real estate.
When selling a house in California, it’s required to use a title company to provide title insurance and write up a preliminary title report.
Often times, negotiations between you and the buyer can determine who pays for the title insurance. In Northern California counties, it’s typical that the buyer pays for the insurance. In Southern California counties, typically the seller pays.
Be sure to check with the county that you’re selling your home who pays for title insurance.
Another thing to be aware of is title insurance procedures. The Real Estate Settlement Procedures Act is a federal law that prohibits the selling party from making any suggestions of a particular insurance company to use for the transaction.
When the house is transferred from the selling party to the buying party, there needs to be a record of the transaction with the county recorders office of a change of ownership.
When this happens, a transfer tax is then applied. As with title insurance, it negotiable which party pays the transfer tax.
Use of an Escrow Agent
California home sellers need to use an escrow company to facilitate the transaction. This neutral party will keep the transferring funds in an escrow account and will transfer the title from the seller to the buyer. In some counties, the title company can double as the escrow agent.
However, if both parties agree, the escrow agent can be a different company other than the title company involved.
Selling a House in California Requires a Lot of Paperwork
When selling a house in California, you must make sure you present the necessary paperwork to close. Relevant documents can include homeowners association documents, original sales contract from when you purchased the house, records of appraisals throughout the years, and lots of other documents.
The bottom line is, California home sales can be more complicated compared to other states. If you need advice on selling your California home, feel free to contact us, and I can help point you in the right direction with your sale.