Happy Chinese New Year of the Tiger! – February 1, 2022
Birth years – 1926, 1938, 1950, 1962, 1974, 1986, 1998, 2010
Characteristics – Independent, a leader, protector, has high esteem of self, reckless
Compatability – Pig, Horse, Dog
Incompatability – Monkey
YOU HAVE QUESTIONS, WE HAVE ANSWERS!
VIVA ESCROW Q & A SEGMENT
(Real questions sent to us – verbatim!)
QUESTION:
While doing a google search, I came across your article “When Reconveyance Issues Pop Up”. I sold a house in the early 1980’s and held a deed of trust. The buyer paid off the loan and I sent him the deed of trust and payment book in the late 1980’s. A couple years later he contacted me saying he’d lost the documents and asking for my assistance. I refused to cooperate as he had not been a nice person to deal with. I have been recently contacted by a real estate agent for the original buyer’s widow wanting me to sign a reconveyance. I have refused. Last night he called and said I was legally obligated to sign the reconveyance and if the pending sale of the property is lost due to my refusal I would be liable for damages to the property owner. Am I obligated by law to sign a reconveyance? If I don’t sign it, am I liable if their sale is delayed or lost?
ANSWER:
Please note that my answers are predicated on the property or issue being located in California, where we practice. Questions regarding the law and legality should be addressed to an attorney. We will not comment on those.
When the loan was paid off you are obligated to return the original Note and Deed of Trust and you should sign a Request for Reconveyance which will authorize the Trustee to issue the Reconveyance. You mentioned that you returned the deed of trust and payment book. That would not be sufficient. You do have to return the original Note and also sign the Request for Reconveyance.
I would strongly recommend that you do sign the Reconveyance form that the Escrow Officer for the sale escrow can prepare for you. If they cannot clear this lien the owner of the property could take this matter to an attorney or even go to Court to get you to sign. Why go through all the expense of hiring an attorney to defend yourself? By law, you have to either sign a Reconveyance or request one from the Trustee who will do so as long as you provide the original Note and Deed of Trust along with your request.
EDUCATIONAL MOMENT:
Don’t let the emotions of the past cloud your present judgment which will incur problems in your future!
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QUESTION:
One from a real estate agent: My seller is a non-resident foreigner. She’s selling a $2.5 million property that has no loan therefore she hasn’t reported any income taxes through the years. Will the IRS withhold 15% sales tax after the sale? Is there any way she can prevent the withholding since her gain is only $100k?
ANSWER:
The only way they can “minimize” the withholding is to apply for a Reduced Withholding. To do so they would have to (1) have a U.S. Tax ID #, and (2) complete an IRS 8288A form. This should be done when they have an actual sale contract and they enter into escrow. It does take 4-6 months for this process to wind through the IRS so if this is the route that they will go, the Escrow Holder, with proper signed authorization from Seller and Buyer, can hold the 15% of the sales price at closing in escrow. Once the Seller receives the approved Reduced Withholding letter the Escrow Holder will then send the amount needed to the IRS and return any balance to Seller.
The two steps – getting a Tax ID# and applying for Reduced Withholding – can be done at the same time using the services of a qualified attorney or CPA to walk the applications through the IRS.
EDUCATIONAL MOMENT:
Seller client should provide Escrow firm proof that they have sent out their request for Tax ID and Reduced Withholding (FedEx label, registered mail, etc), in order for the Escrow to HOLD the full withholding amount of 10 or 15% in escrow after closing until they receive the final paperwork from the IRS.
Important – If you foresee this issue coming up, please contact your intended Escrow Officer before you open escrow to make sure he/she is knowledgeable enough and can do the withholding for you. You don’t want to enter into the escrow and find out your Escrow Officer has no clue or is unwilling to do the withholding.
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~ Funny of the Month ~
(picked up from one of the blogs that I subscribe to with a thank you to Euie H)
We are still battling the COVID-19 and the next thing is here already. Virologists have identified a new Nile virus – type C. It appears to target those who were born between 1930 & 1970.
The symptoms include:
1. To send the same message twice.
2. To send a blank message.
3. To send a message to the wrong person.
4. To send it back to the person who sent it to you.
5. To forget to attach the attachment.
6. To hit SEND before you’ve finished.
7. To hit DELETE instead of SEND.
8. To SEND when you should DELETE.
It is called the C-NILE virus!
And if you cannot admit to doing the above, you have obviously caught the mutated strain: the D-NILE virus.
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~ Quote of the Month ~
“The most effective way to remember your wife’s birthday is to forget it once.”
~ Ogden Nash ~
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Is a Power of Attorney Really Necessary?
Giving a Power of Attorney is an act of faith. Is it really necessary? Whatever the attorney-in-fact signs for you, it is deemed your signature in a court of law. If you do give one out, what are some tips you should think about?
Here is the link:
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You Have Questions? We Have Answers!
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
“Escrow is my FOREMOST language!”
Advance Disclosure:
The opinions expressed in this blog are solely the author’s.
Your comments and viewpoints are always welcome.
Info @ VivaEscrow.com