Expert: liznarr - 8/24/2010

Question
QUESTION: I intend to use a flat fee MLS listing for a FSBO in California regarding raw land.  I intend to quit-claim the purchase.  Must I use an escrow company and title company for the sale to be legal?  I have clear title in possession.  The land is paid for.
I am trying to keep it simple and easy for everyone.

ANSWER: Hi Paul,

I apologize for the delay in answering your question.  I somehow missed your question and have been notified by All Experts that yours is still pending.

You should ask a California attorney for the correct legal answer to your question.  I am not qualified to give legal advice, and I am also not familiar with real estate law in California as it pertains to your question.

I am obviously missing some information as it might relate to your question, because if you are in possession of a clear title and there is no mortgage, I do not understand why you want to use a Quitclaim Deed to sell the property.  

Without knowing more about your situation, I am giving you some general information below.

If YOUR deed is a fee simple absolute (the highest form of ownership), you should have no problem conveying the same type deed; and you would not need to use a Quitclaim deed.

An escrow company simply handles the closing itself, and a title company “insures title” for a Purchaser.

A Seller’s obligation at closing is to convey title by the use of a proper deed; pay off any mortgage and/or liens; pay any city, county or municipal fees required relating to the sale; and, of course, you want to be paid the amount of the sales price.  

In my area, the duty to choose a closing agent is the Purchaser’s obligation, not the Seller’s (unless in some cases a Seller might pay closing costs and stipulates that he/she will pay some or all closing costs if a particular closing agent is to be used).

If, after a title check by a Purchaser, there is any issue uncovered with the title (if you have other-than a fee simple absolute deed), then title insurance is the best guarantee of title that a Purchaser can have.  If you know of any “clouds” on your title, then it might be a good idea for you to offer to pay for a Purchaser’s title policy, or at a bare minimum, disclose IN WRITING that title will be transferred, say, by Quitclaim deed only, and that the obligation to purchase any title insurance will be the Purchaser’s responsibility.

If a title company will not insure and issue a title policy, then it would be your duty to correct any defects in order for a Purchaser to be able to purchase a title policy.

If a purchaser were, say, to agree to Purchase with any potential defects or clouds on a title, you would want to make sure you protect yourself by having the benefit of good legal advice in advance of doing so.

I always recommend to my Purchasers that they purchase OWNER’S title insurance.  Most title insurance covers only a lender, but the additional purchase of an owner’s policy protects a purchaser after any mortgage has been paid off (or, in an event there is no mortgage placed on a property at time of purchase).

I hope my explanation helps.  If not, please send another question and give me more information about your situation.

Good luck to you, and feel free to write again with additional questions.

Regards,
Elizabeth   


---------- FOLLOW-UP ----------

QUESTION: I have a clear title and owe nothing on my land.  I want an easy and simple - even quick - manner to convey the property with the least amount of tape - like a handshake, signature and cash - as in the old days, and thought a quit-claim was it.  What type of document seems to be right for me.

Answer
Paul,

Not to disillusion you, but nothing today is like the old days – except the old timers.  

The type deed you will use to convey your property depends on the ownership interest you have now.  I would recommend having an attorney or title agent draw up your deed for you, if you are not sure which type deed you should use.

There also probably will be county and state recording fees which you will be required to pay, and an attorney or title company can advise you on this.  

You can call the county courthouse/clerk’s office where your property is located and determine the amount you will be required to pay when ownership changes, which is normally based on the sales price.  This same office might also be able to tell you what type deed you have now, and what would be best to use.

Sorry I can’t offer more to you, but I am not familiar with California real estate procedures; and I would not want to give you any incorrect information for you to act on.

Let me know if I can help further.

Regards,
Elizabeth