In California residential real estate transactions, who is customarily responsible for paying the county documentary transfer tax?
Correct Answer
B) The seller, as the party conveying title, though the allocation is negotiable
By longstanding custom in most California counties, the seller pays the county documentary transfer tax because the tax is imposed on the act of conveying title. However, California law does not mandate which party must pay — the allocation is a negotiable term of the purchase agreement and can vary by local custom or mutual agreement.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A deed is a written legal document that conveys (transfers) ownership of real property from one party to another. It must be delivered to and accepted by the grantee to be effective.
For a deed to be valid, it must contain several essential elements including a competent grantor, identifiable grantee, consideration, legal description, granting clause, signature of the grantor, and delivery and acceptance.
Escrow is an arrangement in which a neutral third party holds documents, funds, or other items on behalf of the buyer and seller until all conditions of the transaction are met.
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- → A buyer records a deed at the county recorder's office. What is the primary purpose of recording?
- → A buyer drives past the property and sees someone other than the seller living there and maintaining the yard. This observation should put the buyer on what type of notice?
- → In a covered purchase transaction, the borrower receives a final form showing the loan terms, cash to close, and settlement charges shortly before consummation. What form is this?
- → Along with the signed offer, Quinn Brooks delivers a check to demonstrate serious intent to complete the transaction if the offer is accepted. What is this deposit called?
- → On a settlement statement, the buyer's earnest money reduces the remaining cash needed to close. How is that item characterized?
- → On a settlement statement, an item increases the buyer's amount due at closing. How is that item characterized?
- → On the seller's settlement statement, the purchase price of $400,000 appears as what?
- → At closing, the purchase price of $350,000 appears on the buyer's side of the settlement statement. Is this amount a debit or a credit to the buyer?
- → Under TRID rules, the lender must deliver the Closing Disclosure to the borrower at least how many business days before loan consummation?
- → In an escrow closing, the escrow agent discovers that the seller has not yet provided the signed deed. What should the escrow agent do?
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