All states have unique laws about buying homes in their state, and California is no exception. If you have bought a home in another state, your experience could be completely different than your experience in California.
Before buying a home, you may want to read about some of the unique laws to see how they will affect you.
The first issue that may be of some consideration to you is taxes. California has something called Mello-Roos taxes, which are imposed on property owners to fund improvements to local infrastructure.
The law that allows these special taxes was authorized by two politicians with the last names Mello and Roos. The funds from these taxes finance bonds that are used to build streets, improve or build sewer and sanitation systems, police and fire protection, parks, schools, and other local facilities. In order to be charged Mello-Roos taxes, a property has to be located within a Mello-Roos Community Facilities District.
Before buying a home in California, you should investigate whether or not the property is potentially subject to Mello-Roos taxes, and what the expected payment is.
Interestingly, under California law, buyers and sellers are allowed to be represented by the same real estate broker in a transaction. An arrangement in which the buyer and seller are represented by the same real estate broker is called a dual agency relationship. Many states do not allow a dual agency arrangement.
There is inherently a conflict of interest that arises when an agent is working with both a buyer and a seller. Obviously, the buyer wants to pay the lowest possible price for the property, while the seller wants the maximum price for the property.
It can be extremely hard to facilitate that type of arrangement objectively without sharing confidential information with either party. In California, as long as both the buyer and the seller consent to the arrangement in writing, the agent is allowed to represent both parties.
In California, it’s highly possible the buyer and seller will never meet each other in person. In some states, the buyer and seller are both required to physically attend a closing. At the closing, the buyer or the lender will provide funds for the purchase price, the seller signs a deed to the buyer, the deed is registered so that the buyer appears as the owner, and money from the sale is distributed to the seller.
In California, in most transactions the buyer and seller do not ever meet each other. This can make the transaction proceed more efficiently, since the closing is not contingent upon the parties’ schedules.
In California, home sellers are required to issue disclosures that are much lengthier than in many other states. California requires a high level of disclosure on home sellers. They are required to tell prospective buyers about the property’s features, pest control issues, physical condition, material defects, environmental issues, and other problems.
It’s important for buyers to read the disclosures very carefully, while also keeping in mind that a seller may not know everything about a property.
Finally, in California, you are not required to have an attorney to represent your interests at the closing. Some states require an attorney, because real estate transactions are typically complex and buyers and sellers may get easily taken advantage of if an attorney is not involved. However, California does not require that either party have a real estate attorney.
In California, most offers involve a form called the Residential Purchase Agreement and Joint Escrow Instructions. A real estate agent can help complete the form, sign the form and it can be the final contract.
However, just because attorneys are not required to be involved in real estate transactions does not mean they shouldn’t be.
Real estate is a complex area of law and there can be multiple issues that may arise during the offer, contract, or closing process, which can result in disaster if not handled properly.
California has a reputation of being a state which is friendly to home buyers, which can make it a great state in which to buy property. If you have any questions about a real estate transaction in California, and you are in the Oakland area, call Oakland – Walnut Creek real estate attorney Robert Levy at 510-465-0025.
He will provide you with a free consultation on your case. Call today to learn more or to schedule a free consultation on your case.