Legal Question in Real Estate Law in California

It is normally a function of escrow to determine the current pay-off amounts of all liens except those the buyer is expressly assuming, and pay them off from the sale proceeds received from the buyer, before the seller gets his first dime. Things go wrong sometimes, but most escrow companies handle this very competently. I'd recommend discussing your specific concerns (I assume you are the buyer) with the escrow officer assigned to your transaction.

There is no such form and it is legally impossible to do what you suggest. The seller has granted a legal interest in the property to the trustee of the deed of trust. The legal rights that go with that belong to the lender, not the seller. The seller gave them to the lender in return for the loan. So there is no legal thing the seller can do to obtain a release of those rights, other than pay the debt - which compels the lender to release the deed of trust ("reconvey" is the technical term). In some rare circumstances the seller may be able to obtain a release from the lender without paying the debt off, but they would not apply to a simple home loan.

The way the buyers protect themselves from the seller's liens is by having an escrow for the transaction that makes paying off the existing loan and any other liens a condition of closing. That way the purchase money - whether cash from the buyer, the buyer's new loan funds or a mix of the two - must be used by the escrow holder to pay off the debts behind any liens, and only what's left goes to the seller. If the seller does not agree to those escrow instructions, the escrow does not close and the seller is in breach of the contract to sell the property. The title company that issued your preliminary title report almost certainly offers escrow services. If you are doing a normal home purchase/sale using real estate agents, no doubt you already have an escrow open with them, which triggered them preparing the prelim.

It is almost certain thqtthe Deed of Trust hass a "due on sale" provision. You can't do the sale without paying the loan off, or getting the lenders approval of your taking over the loan. To do otherwise probably defrauds the lender.