Dear Michael: I want to transfer my home to my son. What type of transfer do you suggest and is there a property tax reassessment?
Answer: What you are referring to is called a Quitclaim Deed. A quit claim deed does not contain any implied warranties. The owner who quit-claims real estate simply conveys whatever ownership interest he or she has along with any debt or loans secured by the property. The quitclaim owner makes no promises and the property is taken “as is.” A quitclaim deed is the simplest and cheapest way to transfer ownership to a trust, add or remove a co-owner. A change in ownership of real property increases the base for property tax. The increase is either the sale price or the market value at date of ownership change. However, In the State of California if the sale or transfer is between parents and their children (prop 58), or from grandparents and grandchildren (prop 193), provided that the grandparents are deceased at of the date of the transfer, the property will not be reassessed. To obtain the exclusion “The Claim for Reassessment Exclusion for Transfer between Parent and Child” form must be filed within three years after the date of the transfer.
Dear Michael: What happens on the day of closing of escrow and can I move in on that day?
Answer: The actual day of your closing will be 2 days after which you as the buyer deposit any remaining money due into escrow and sign your escrow and loan documents. Loan documents are then returned to the lender for final underwriter approval. Closing is the day in which the Grant Deed is exchanged for the sales proceeds (money). “Recording” takes place on the closing day. The grant deed and any mortgage documents are taken to the county court house and recorded as official records. These documents are then made as “public record”. The actual day that you can move in will be determined by the terms of your purchase agreement. It may be the day of closing, or it may be a day or two after the closing.
Dear Michael: We are getting ready to close escrow on our new home. At closing does the seller or buyer pay the property taxes?
Answer: Property taxes are pro-rated from the date of closing – that is, the seller pays the days that he or she owned the house until closing, and the buyer pays any remaining days left for the current tax bill as well as any supplemental bill that is due within 60 days of the closing. Property tax bill is from July 1 until June 31. All taxes may be negotiated as part of the purchase agreement – if the seller’s agreement to pay the upcoming tax bill is enough to make a price agreeable to both parties, there is nothing stopping the parties from making this agreement before a purchase contract is executed.
Michael Kayem is a Realtor with Re/max Estate Properties serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: homes@agentmichael.com
