For Sale by Owner in California: Laws and Guidelines
Despite the fact that the cost of living in California continues to rise, the amount your family brings home just hasn’t caught up. Even if it had, you’re not sure you’d want to stay—not in your current home, anyway. You want more for your life, your spouse, and your kids. That means, your money has to stretch further than just barely covering the bills. So, you’ve already started looking for a new house—something a little smaller and in better condition, maybe in a suburb that isn’t expensive.
The average cost of selling a home in California may surprise you once you start doing some digging. You may have uncovered by now that one of the biggest expenses is a real estate agent’s commission, so the decision to sell the house on your own may seem obvious. You need to cut costs wherever you can, and doing a “for sale by owner” might not sound all that difficult.
It is true that selling a house privately can be easy. But, there are laws about selling real estate that you should be aware of since, in California, these laws apply to “for sale by owner” transactions, too. So that you don’t unwittingly break those laws, and make life even harder financially, we’ll cover what you need to know in order to legally—and quickly—sell your house yourself.
Laws for Conducting a “For Sale by Owner” in California
Obviously, one reason you’ll want to know how to legally conduct the sale of your house is to avoid any trouble that could arise long after it’s sold. Since trouble usually comes in the form of a lawsuit, getting sued isn’t worth the risk to your finances—especially if you’re selling your property without an agent to save money. Even if you win the suit, you’ll have paid a high price in both time and money to get there. And that won’t do anything to help you or your budget.
There are laws about selling real estate that you should be aware of since, in California, these laws apply to “for sale by owner” transactions, too.
But you also don’t want to do anything to threaten the sale of your home, particularly if you need to sell the house fast. Almost any misstep can slow down the sale by turning interested buyers off. Some mistakes can even stop the sale in its tracks. So, here is what you need to know about the laws for conducting a “for sale by owner” in California:
Disclose All Facts About the Property
Whatever details you know about your property, need to be disclosed to every potential buyer—even when selling your home “as-is.” So, if you’re selling a house that needs a new roof or that has a cracked foundation, you must tell your buyer even if they perform their own inspection. In fact, it’s in your best interest to have the house inspected before you list it so that you have a report to give each prospective buyer. Plus, claiming ignorance of a problem’s existence won’t stop you from getting sued—even if your claim is true.
The same applies when you’re selling the house after the death of a parent, spouse, or other family members, friend, or visitor occurred within. It doesn’t matter whether the death was natural or accidental. If it happened within the last three years, you have to disclose it. Since anything you don’t share can and will be held against you, if you know about an older death on the property, you should go ahead and disclose that information, too.
It’s in your best interest to have the house inspected before you list it so that you have a report to give each prospective buyer.
Provide All Information in Writing
A paper trail helps to minimize any miscommunication, but it also makes every aspect of your home’s sale valid. So, the contract with your buyer has to be in writing, as do your disclosures regarding what you know about the property. The paperwork has to be recognized by the state, too. So, use only a California Residential Purchase Agreement and Joint Escrow Instructions document. Be sure to record the other agreements you make as well—like how much you’re compensating your buyer’s real estate agent—to keep everything clear but also to protect you from fraud.
Give Tenants Enough Time to Leave
If you’ve been using your home as a rental, you have to give the tenants enough time to move. At a minimum, that usually means providing 30 days’ notice to vacate the premises. But it could be more like two months and then still take longer for your tenants to actually leave. Unfortunately, how much notice you’re currently required to give can vary by location and tenants may delay, even resist, when it’s time to go if a house has been their longtime home.
Before you hand your tenants any notice, research state and local rules about when, how, and why you can rightfully evict them.
The length of time your tenants have lived in the house matters in the eyes of the law, too, as do their ages and health status. Your reason for the eviction may make a difference to the process as well. Sometimes, wanting to sell the property isn’t reason enough—especially if your tenants are responsible and have always paid on time. Even squatters have rights in California, making it tough to throw them out. And, though tenants in single-family homes often have fewer rights than those in big buildings, even a handmade partition can suddenly, and legally, turn the home into a multi-family—and subject you to stricter ordinances.
Also, bear in mind that California recently passed statewide rent control. This could make all evictions that much harder in the near future. So, before you hand your tenants any notice, research state, and local rules about when, how, and why you can rightfully evict them.
Extra Steps to Ensure a Secure Sale of Your Home
There are a few other points that you should consider about California’s laws for conducting a “for sale by owner.” First: though there are several things you’re not legally required to do, you should do them anyway since they protect you and your buyer. Using an escrow company, for example. Having a neutral third party handling the transfer of funds ensures that the transaction goes smoothly and that no one is a victim of fraud. Providing title insurance is another example. Lenders usually need it before they’ll fund a borrower’s loan since it ensures the buyer will own the house free and clear of any liens. To make things easier for the buyer—and help them close on your house—it’s in your best interest to pay for title insurance.
Of course, in doing a “for sale by owner,” you want things to be simple for you, too. That’s not always easy when you’re worried about following state laws in addition to selling your house. But there is a buyer who can make the sale run smoothly by handling all the details for you and also paying you all cash.
You don’t have to hassle with preparing your home for sale or putting it on the market just because you didn’t hire a real estate agent.
All You Need to Know to Sell to an All-Cash Buyer
Locally owned and operated Sell Your House Direct can buy your home as-is directly from you. We can put cash in your hands in seven days or less, too, if you need to close fast and for a fair price. That means you don’t have to hassle with preparing your home for sale or putting it on the market just because you didn’t hire a real estate agent. You don’t have to worry about knowing the real estate laws in California for doing a “for sale by owner,” either—including how to properly evict tenants if you happen to have renters. We will handle it all if you accept our offer on your home. We’ll even arrange for the moving truck to help you further cut costs.
In fact, all you need to know is how to get in touch. And know that, once you do, you’re under no obligation to sell. We’ll simply make you a cash offer that is fair as well as fast. We’ll also guide you toward other buyers if what we can offer isn’t the highest you can get.
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