Posted by David Alexander on July 23, 2007 at 11:00:24:
What I just said… Lol… (Glad you made it more thorough)
David Alexander
Prop is in a Trust, How can I buy it? - Posted by Brian, WI
Posted by Brian, WI on July 22, 2007 at 08:38:22:
Long story short…2 months ago I got a call from someone that recieved a letter I sent out 12 years ago and after a lot of rapport building, I’m getting closer to buying the property.
This is a 4 unit building that the city has assessed at $247k. I told seller (sweet little 97 year old lady) I was embarassed to tell her my offer. It was $175k. She said she was hoping for closer to $200k (still too much with low rents and needed tlc).
She wants to do business with me and liked in my letter that I said I could help her save capital gains taxes, explaining how she would have to be the bank. She understood, saying she is 97 and doesn’t know how long she will be around. I’m sure she doens’t need the money now and it sounds like a son gets this part of her estate, but doesn’t want the property.
Anyway the propery is in a Living Trust and I think her son could be the trustee. Is there a way to buy this property, keeping it in the Trust, the Trust doing the financing and the lady getting payments now, the son later, even if it’s years down the road? How do I write up the offer, me as the buyer and the Trust as the Seller? Do I need to get a copy of the Trust to know what is allowed within it?
Any and all other help is appreciated. She should be calling me back in the next day or 2 so we can talk about this more.
Thanks
Brian,WI
Buy property from trustee…easy as defrosting pie - Posted by Rick, the Probate Guy
Posted by Rick, the Probate Guy on July 22, 2007 at 21:02:32:
Don’t make this too complicated for yourself or the seller. The trust is an entity, and the entity owns the real property. If you prefer to think of it this way, it’s like putting the deed to the property into a paper bag and buying the paper bag (with the deed to the realty inside).
The trust document is normally a private matter between the parties associated with it. I doubt if the family will be receptive to you purchasing any beneficial interest in the trust.
Better to have the trustee for the XXXXX trust sell you the property via a deed and possibly carryback a purchase money mortgage/trust deed from you as buyer. This would typically be a sale with title insurance and some sort of escrow or closing agent.
Similarly, if you were buying property that was owned by a corporation or LLC, for example, the officers or directors or persons with authority to sell would negotiate a deal with you and transfer the property to you, as buyer, via a deed. Title company would ask for documents supporting the powers of the sale, and the sale closes.
Same thing here. Title company will ask for certain documents from the seller (as trustee or successor trustee) which support his/her authority to transfer the property. THis might include a copy of the essential pages of the trust and a trustee’s certification, for example. It isn’t anything fancy or complicated, this way.
At this point, I’d put the idea of purchasing an assignment of interest in the trust out of your mind. Keep it simple and you’ll have a better chance of explaining your intentions to the family and close the deal that you hope to make.
Re: Prop is in a Trust, How can I buy it? - Posted by David Alexander
Posted by David Alexander on July 22, 2007 at 19:44:11:
The trust would sell the property as normal… Warranty deed etc… Deed the property out of the trust to you… the take back a Deed of trust made out to the Trust… trustee… The son could be the trustee on the DOT… in the event or need to foreclose…
I don’t see why you would want it to stay inside their trust… doesn’t make since to me…
They would still get installment treatment as well…
David Alexander
Bill of Sale… - Posted by JT-IN
Posted by JT-IN on July 22, 2007 at 16:29:19:
Is used to buy personalty, which is what the corpus of a trust happens to be, regardless of whether it is real property, but when owned by the Trust, it is no longer considered real property. Your bill of sale will stipulate the price, terms, etc., and upon it’s terms, and instruction from the party of Beneficial Interest to the Trustee, the Trustee will transfer the Beneficial Interest to you, or your entity. Transfer is then done.
The Trust, by it’s Trustee, will want to secure as collateral, the Ben Int of the Trust, in the event that you do not pay per the terms.
Yes, you will want to review the terms of the Trust in advance. It is highly possible that the Trust contains many things beside this property. In the event that it does, a new Trust may need to be created, which may then create a taxable transfer. You will want legal counsel beyond this point, once more details are known about the Trust content.
JT-IN