TIP OF THE MONTH (JANUARY 2009):   Escrow 101 - Understanding the Seller's Property Information Form.

This month's tip explains the Seller's Property Information form. As a Seller in a transaction, you can expect to receive this document shortly after the escrow is opened. The information requested from you is not available from other sources, so your attention to this form is particularly important to your escrow officer.
The Property Information form has several sections, each of which serves a special purpose.

Existing Loan Information.

Use this section to disclose all loans which you currently have on your property. Providing an accurate loan number is particularly important, as your escrow officer will need this information in order to obtain your loan payoff statement. The law requires your escrow company to have your written permission to obtain your loan payoff information. When you sign the statement, you are providing that authorization.

Credit Lines.

If one of your loans in a line of credit, it is best to stop using the account during the escrow period so that an accurate payoff statement can be prepared by your lender. Your escrow officer may provide a copy of this form to your lender to request that your account be "frozen". By placing your initials in this section, you indicate that you understand this process.

Property Reports.

Many cities have ordinances which impose requirements on Sellers when they sell their property. These may include the disclosure of a home's building permit history and satisfaction of water conservation and retrofit requirements. Because these laws vary widely throughout California, it is important to inform your escrow officer about any local laws which might affect the closing of your escrow.

Tenants and Leases.

Advise your escrow officer if your property is rented to tenants. Your purchase contract may provide for a proration of the monthly rent and adjustments for security deposits. If so, your escrow officer can provide a Rent Statement which you can use to provide the required information.

Owner's Associations.

In this section of the form, you will tell your escrow officer about the homeowner associations which affect your property. During the escrow process, the associations will be contacted by your escrow officer for a statement of your account and property transfer requirements. If the fire insurance premium is included in your regular association dues, check the box provided for this purpose. This helps your escrow officer anticipate what will be needed to satisfy insurance requirements for the buyer in your transaction.

Seller's Instructions to Escrow Holder.

In the final paragraph of the Property Information Statement, you, as the Seller, instruct your escrow officer to order the necessary payoff statements and other documents which are needed to close your escrow. You also agree to pay the costs associated with these services. Sign the form, provide your social security number and, if possible, a forwarding address.

REAL ESTATE TAX WITHHOLDING LAW CHANGES FOR 2008:

When a sale escrow is opened, Sellers can expect to receive Franchise Tax Board (FTB) forms in their document package. Here are some brief guidelines to help Sellers understand the use of these forms and the changes for 2008.

Form 593-C Real Estate Withholding Certificate.

Complete this form to show whether withholding applies to your transaction and return it to your escrow officer.

• If you can answer YES to any question in Part II of this form, you are exempt from withholding and no other forms are needed from you.


• If you can answer YES to any question in Part III, you may qualify for partial or complete exemption.


• If you can not answer YES to one of these questions, withholding is required, and you must complete Form 593 which is described below.


• If Form 593-C is not signed and deposited into escrow or if your social security number is missing, your escrow officer is required to withhold 3-1/3% of the sales price and to submit these funds to the Franchise Tax Board.
  

• If you are not exempt from withholding, use this form to select your method of withholding. You may choose the standard method which is 3-1/3% of the sales price or the Optional Gain on Sale Election.


• Sellers have the option to withhold based on the amount of gain on the sale rather than the total sales price. For a Seller who is eligible, this method may result in a decrease in the amount of funds withheld at closing.


• Your financial advisor can help you determine which withholding method is best for you. Be sure to complete all information.

PLEASE NOTE EFFECTIVE JANUARY 1, 2008.

NEW FORMATTING STANDARDS  -  see "CONTACT US"

FOR REGISTERED LAND DOCUMENTS:

All Registered Land documents that are recorded are retained by the registered land section. If time stamped copies are needed, send duplicate originals. It is recommended that for a recording that involves both registered and recorded land that duplicate originals be submitted.

Registered Land may have stronger requirements for documents required for recording. The most common are with recorded authority of the individual/s or entities executing the documents. If there are any questions, the documents can be sent for review by this office prior to recording.

REMEMBER:    Documents that are considered a “multiple” will be charged for each action created. One discharge of three mortgages will be charged as if three

discharges Although this varies according to each registry, care should be taken in advance.

Registries do not give change and in most cases will not accept overages. Separate checks for each document or blank checks are advised.