Posted by Dan(FL) on February 13, 2001 at 21:06:00:
Brian-
Thanks for your time and patience. Ive seen your name on this site many times and was relieved to see it in reply to my questions. Thanks again.
Dan(FL)
Land Trust - bumps in the road - Posted by Dan(FL)
Posted by Dan(FL) on February 12, 2001 at 18:39:25:
I am purchasing a property using bronchicks trust course and have run into a few snags. Im sure there are simple answers to them. Im just uncertain and if anyone can help me I would be grateful.
First a little info- taking subject to with $2500 cash to seller. Placing into trust with friend as trustee and assigning interest to me.
1)In the trust agreement, #11 why is the seller made the trustee in case of something happening to the named trustee. Shouldnt I put someone other than the seller in this position? why not myself, or another trusted friend?
2)Are the amounts that go in the contrcts important? In the assignment of benn interest form, $100 is in the Appendix B part. In the Bill of sale form where “consideration of the sum of ________” is, what amount goes here? The amount of cash to the seller,the total with the subject to mortgage or does it matter? How about what the Trustee gets annually-$50-we know they wont really get it.
- On the bill of sale form where it says" received lawful money from__________" do I put my name or the name of the trust in there?
4)If the seller is still living there, how do I alter the contract so it takes effect at a later date- say the beginning of the month? Is this when the paperwork should be signed(closing)?
- DO you always do a title search and at what point? The warranty deed doesnt cover this area somewhat?
Thank you all in advance.
Dan(FL)
Re: Land Trust - bumps in the road - Posted by William Bronchick
Posted by William Bronchick on February 13, 2001 at 11:26:09:
1)In the trust agreement, #11 why is the seller made the trustee in case of something happening to the named trustee. Shouldnt I put someone other than the seller in this position? why not myself, or another trusted friend?
>YOU can be the trustee in this case
2)Are the amounts that go in the contrcts important? In the assignment of benn interest form, $100 is in the Appendix B part. In the Bill of sale form where “consideration of the sum of ________” is, what amount goes here? The amount of cash to the seller,the total with the subject to mortgage or does it matter? How about what the Trustee gets annually-$50-we know they wont really get it.
>They aren’t important . . . just fill in something!
- On the bill of sale form where it says" received lawful money from__________" do I put my name or the name of the trust in there?
>The assignee of the beneficial interest goes here
4)If the seller is still living there, how do I alter the contract so it takes effect at a later date- say the beginning of the month? Is this when the paperwork should be signed(closing)?
>It should take place immediately - just sign a lease with the former owner
- DO you always do a title search and at what point? The warranty deed doesnt cover this area somewhat?
>Always do a title search before paying the seller any money. The warranty will give you a right to sue, but it is meaningless if the seller is insolvent.
Re: Land Trust - bumps in the road - Posted by B.L.Renfrow
Posted by B.L.Renfrow on February 12, 2001 at 22:50:46:
Looking at the most recent trust deal I did, using Bronchick’s documents, here’s what I see:
“1)In the trust agreement, #11 why is the seller made the trustee in case of something happening to the named trustee. Shouldnt I put someone other than the seller in this position? why not myself, or another trusted friend?”
Paragraph 11, in the form I have, is Death or Incapacity of Trustee. It doesn’t say anything about naming the SELLER as trustee; that would make no sense. It has two spaces for you to insert names of successor trustees. You would use the same criteria as when choosing your primary trustee. You wouldn’t insert the seller’s name there.
“2)Are the amounts that go in the contrcts important? In the assignment of benn interest form, $100 is in the Appendix B part. In the Bill of sale form where “consideration of the sum of ________” is, what amount goes here? The amount of cash to the seller,the total with the subject to mortgage or does it matter? How about what the Trustee gets annually-$50-we know they wont really get it.”
On the Assignment of Beneficial Interest in Trust, that’s $1.00 (one dollar), not $100. Although I suppose you can put $100 if you want! Regarding the trustee’s compensation, I do indeed pay my trustees $50-$100 per year. That’s far less than an attorney, bank, etc. would charge for trustee services.
“3) On the bill of sale form where it says” received lawful money from__________" do I put my name or the name of the trust in there?"
I always put my name there. The trust is identified in the next paragraph.
“4)If the seller is still living there, how do I alter the contract so it takes effect at a later date- say the beginning of the month? Is this when the paperwork should be signed(closing)?”
That is addressed in the Addendum to Contract and/or in your purchase agreement. Regardless, the transfer isn’t effective until the deed into the trust is recorded.
“5) DO you always do a title search and at what point? The warranty deed doesnt cover this area somewhat?”
Uh…YES…unless you want to risk being stuck with who-knows-how-many liens and judgments attached to the property which the seller conveniently forgets to mention. It must be done before you record the deed, because after you record, it’s yours.
No offense meant, but did you read the manual, or just skim the forms? There are detailed explanations of these issues in the course itself.
Brian (NY)
BRONCHICK TO THE RESCUE…ASAP!! - Posted by Josh
Posted by Josh on February 12, 2001 at 21:51:41:
N/T
Not so sure this is… - Posted by Herb
Posted by Herb on February 12, 2001 at 19:12:32:
An up to date form you’re using.
My forms don’t have any of that on it. They are really simple to understand and fill out.
How old is that course material you’re using? You may need to re-order more contemporary material.
Herb
Re: Land Trust - bumps in the road - Posted by Dan(FL)
Posted by Dan(FL) on February 13, 2001 at 20:56:27:
Mr. Bronchick,
Thanks for your help with these questions. I really appreciate it.
Dan(FL)
Re: Land Trust - bumps in the road - Posted by Dan(FL)
Posted by Dan(FL) on February 13, 2001 at 06:36:11:
Brian-
Thanks for answering my questions. Your answers are very helpful.
Yes I did read the manual, but like in question #1, Mr Bronchick has the seller named trustee if something should happen to the appointed one in the appendix B (filled in example) part of his manual. Inquestion #2 he has $100.00 in the blank for the trustee fee. I was interested to see if this was usual , the norm, what others paid their trustees. I just received this last week and it is the revised for 99’ version. Maybe your version is a little different. The title search question came from using a warranty deed vs. quit claim deed. I guess what I am asking is if I still need to do a title search, what is the benefit of using one vs. the other?
Im not offended, just want to make sure I have everything correct. No slip-ups.
Thanks again,
Dan(FL)
Re: Not so sure this is… - Posted by Dan(FL)
Posted by Dan(FL) on February 12, 2001 at 19:18:27:
I just got this in the mail last week!!
Re: Land Trust - bumps in the road - Posted by B.L.Renfrow
Posted by B.L.Renfrow on February 13, 2001 at 07:46:55:
While I certainly can’t speak for Bill, I would assume the part about naming the seller as successor trustee to be a typographical error. I pulled out my copy of the course, and in appendix page B-5, where it is filled in, he has written “Tina Trustee” and “Northwest Bank.”
As for warranty deed vs. quit claim, either one will work. My attorney recommends always getting a warranty deed, as he feels the benefits are greater. But I don’t personally see that it makes a whole lot of difference in the vast majority of deals. However, if there was a title defect down the road, you’d have recourse against the seller with a warranty deed, which you wouldn’t have with a quit-claim. But every subject-to seller I’ve encountered has no money or assets to speak of, so it wouldn’t really matter. Of course, that’s the purpose of title insurance also.
But remember that – no matter what kind of deed is used – any liens or judgments will transfer with the property, so that’s why the title search is vital, before you record the deed.
On some straight-forward deals, I simply do the search myself – which I DON’T recommend if you are a newbie. Unless you are completely comfortable and know what you’re looking for, it’s well worth whatever you pay an attorney or title company to do it for you.
Brian (NY)