Re: Ah, No… - Posted by Jim FL
Posted by Jim FL on September 14, 2004 at 16:33:38:
I think the mentioned method has merit, for the sake of making things simple.
However, reality has dictated that no matter how well a seller understands what is before them, they still don’t really care as long as what they sign cures their pain.
I prefer to have the assignment route, for one main reason.
When you buy a property sub2, the way you mentioned, this would make a transfer tax due at recording of the deed.
Because the only way, as I understand it, a transfer tax is not due when transferring property to a land trust (state laws vary of course, this is based on mine), is when the trust is owned by the grantor. (in other words, transferring to a trust for ones own benefit does not require a RE transfer tax to be paid when recording.)
Which, in the case of the assignment, when the deed was executed, was the case.
The assignment of ben. int. is the REAL transaction in my opinion, and since this is a personal property transaction, no real estate transfer tax is due.
I buy land trusts, not houses…make sense?
One other smaller benefit, which some disagree on, but I have yet to enounter as an issue, is that if for some unknown reason the lender were to make noise, a copy of the trust showing the original barrower as ben. int. should and has shut them up.
No need to show them the PRIVATE assignment of ben. int, if all they ask for is a copy of the trust.
Even though technically you can tell lenders to pound sand when asking for a copy of your trust, sometimes it might just be easier to make them go away.
Disclaimer though, I’ve only done this a couple of times, a long time ago.
One lender sent a letter wanting to know why the title was transferred and to send a copy of the trust.
Not knowing any better, sometime back, a long time actually, I sent in a copy of the trust…they asked for it, right?
Never heard another word from the lender, and sold the house 3 years later for a nice profit.
So, sure, keeping the beneficial assignment in there is a good idea…IMHO.
But hey, what do I know? Only been at this a few years…both after and even before some of those others you mentioned.
Oh, and I STILL post here, and will as long as JP and Terry will have me…this is where I began too ya know!