Q: I have put my home up for sale, and my contract goes for two more months. I have since changed my mind and do not want to sell. What are my options; what is my liability to the Realtor? — via askedith.com
A: If you have not signed a sales contract with a buyer, you are free to take your home off the market whenever you wish. Although most brokers don’t request it, you could be asked to reimburse them for out-of-pocket expenses such as advertising costs while your home was being marketed.
One caution: If you later sell the house to someone who viewed it while it was listed, you could be liable for a commission. If your listing contract contains such an extension clause, it should state how long that provision would apply.
Quick Claim used by families
Q: Do you have any information on a “quick-claim deed” to turn over a house to someone? — C.R.
A: A deed is like a bill of sale but for real estate rather than for personal property. The person who is selling or giving real estate to another signs a deed, and when it is handed over, ownership has been transferred.
Some deeds include warranties — legal guarantees that the person signing the deed is really the owner and that no one else will be claiming the property.
A quit-claim deed contains no warranties, but if the person signing it really owns the property, it can transfer ownership as effectively as a more complicated document would. Quit-claims are often used for transfers between family members.
Because they are relatively simple, they’re sometimes called “quick-claim deeds.” The word really is “quit,” though. The person signing the deed quits — gives up — any claim to ownership of the property. I could give you a signed quit-claim deed to the Brooklyn Bridge, and I wouldn’t be breaking any law, because it doesn’t say I owned it in the first place.
After a deed is signed, it should be entered in the public records to let the world know there’s a new owner. It must be in proper form to be accepted for recording, which is why it’s best to have a lawyer take care of the paperwork.
Owner holds Mortgage on land
Q: I am selling some land and holding a $130,000 first mortgage. How else can I protect myself besides having both the wife and husband sign the mortgage? — F.S., Canandaigua, N.Y.
A: If you haven’t already signed the contract to sell, you can protect yourself in two ways.
Hold out for a substantial cash down payment. This means the buyers would have something to lose if they walked away from the debt, and it gives you money in case you end up in expensive foreclosure proceedings. And make the deal dependent upon a satisfactory credit report on the buyers.
If you’ve already signed the contract, there’s not much you can do to protect yourself, except to have your lawyer either draw up the mortgage papers or at least OK them. If it’s not too late, you may want to put in some provisions about what would happen if they wanted to borrow more money to develop the land.
Abstracts have historical information
Q: In regard to keeping abstracts, surveys, deeds etc. Often the local historical society might be happy to receive them for their archives. I found this to be so when I had occasion to dispose of an abstract for a house I sold. The information on these documents are an interesting insight into the history of the area. — M.E.H.
A: Thanks for an excellent suggestion. As I said, an abstract that goes back far enough can make fascinating reading.
How to Close the Deal
Q: I’ve been reading an excellent book on how to buy real estate investments. My wife and I have found a four-family house we want and we’ve reached an agreement with the seller. The book says I can take a signed sales contract to a title company that will take care of all the documents and do the closing. But when I call title companies, they say all they do is search the title. What can we do? — via askedith.com
A: Settlement customs vary widely across the country. In Maine, they pass papers; in California they go to escrow. In some areas, special companies do nothing but handle closings. In New York and New Jersey, lawyers usually run the proceedings. Where the author of that book lives, it’s title companies.
As a real estate investor, you should have your own lawyer and certified public accountant all lined up. They can tell you about local procedures.
Edith Lank will respond personally to any question sent to www.askedith.com or to 240 Hemingway Drive, Rochester NY 14620.