When it comes to the transaction at closing, the abundance of paperwork and intricate terminology can make it difficult to comprehend who should sign a trust deed and when. Nevertheless, there are numerous advantages to holding real estate in a revocable living trust, such as evading probate, protection from creditors, and estate tax savings. Therefore, it’s worth investigating whether or not signing a trust deed is necessary when selling your Florida home. It’s essential to note that this article provides information only and does not offer legal or financial advice.
What is a Trust Deed
A trust deed is a legal document that serves as a promissory note and a loan on a property, intended to safeguard a lender’s investment. In Florida, selling a property may require the involvement of a trust deed, depending on the prevailing state laws. The primary purpose of a trust deed is to ensure that the lender has a legal claim on the property if the borrower defaults on the loan.
Unlike traditional mortgages, which must undergo a judicial process in the event of a default, trust deeds follow a non-judicial foreclosure process. This means that in case of a default, the lender can initiate foreclosure proceedings without going to court. Non-judicial foreclosure is a faster and more cost-effective option for lenders since it enables them to regain their investment quickly.
Furthermore, trust deeds come with a “power of sale” clause, which grants the lender the right to sell the property to recover the unpaid loan balance without the need for a court order. This clause makes trust deeds a popular option for lenders since they offer more flexibility and less bureaucracy than traditional mortgages.
Selling with a Deed of Trust
If you have a trust deed on your property and are planning to sell your house in Florida for an amount less than what you owe on the loan, you will need to obtain permission from the lender before proceeding with the sale. The lender’s permission is required because they have a legal claim on the property through the trust deed, and selling the property for less than what is owed could potentially result in a loss for the lender.
In the process of selling a property with a trust deed, several documents are involved, but three primary documents stand out: the deed of trust, the promissory note, and the deed. The deed of trust, also known as a trust deed, is the legal document that provides the lender with a security interest in the property. It outlines the terms and conditions of the loan, including the interest rate, repayment period, and the consequences of default.
The promissory note is a written agreement that serves as evidence of the borrower’s debt and the lender’s right to collect the debt. It outlines the amount borrowed, the interest rate, and the terms of repayment. The promissory note is often secured by the deed of trust, which gives the lender the right to foreclose on the property in the event of default.
Who Signs a Deed of Trust
Now that you understand more about the deed of trust, we will break down just who should sign a trust deed when selling your house in Florida. There are always three parties involved: the beneficiary or lender, the trustor or borrower and the third-party trustee who holds the legal title; this is often a title company. The third-party trustee is to remain impartial, taking no actions which would benefit the trustor or the beneficiary. The third-party trustee will use the proceeds from the sale to pay off any outstanding portion of the loan, and then any remaining funds go to the borrower. Should the loan be paid entirely before the sale, the third-party trustee will dissolve the trust and transfer legal title to the borrower.
What does all this mean? The bottom line is if you are selling your house in Florida, you should never be required to sign a trust deed. Instead, when buying your next home, consider taking advantage of estate planning services that have become more accessible and affordable through various online providers that can ease the burdens of your beneficiaries at such a difficult time.
Talk to the professional buyers at The Fast Home Buyers today if you are selling your house in Florida and have been wondering about trust deeds. Professional buyers like those at The Fast Home Buyers will provide you with the information you need to understand your property’s current market value, detailing the expenses you can expect should you decide to list your property for sale instead of selling directly. Then, when you compare what you could profit from listing vs. our offer, which we want you to agree is fair, you can make an educated decision about what works best for your circumstances.
At The Fast Home Buyers, our professional buyers are highly educated, seasoned local investors who have built successful careers in the Florida real estate market. At The Fast Home Buyers, we’re passionate about helping our neighbors resolve any issues they have with buying or selling their homes. If listing your Florida house is best for your situation, the professional buyers at The Fast Home Buyers will tell you so. Time is of the essence for many sellers, and if this is the case for you, you can relax knowing that you will have a guaranteed closing date. Most properties’ closings are fast, typically within a week or so. If that’s a bit too fast, speak to one of the professional buyers at The Fast Home Buyers about picking the calendar date that works best for your upcoming move. At The Fast Home Buyers, we can even arrange to clean your property inside and out; just take what you like and leave the rest to us.
The professional buyers at The Fast Home Buyers understand the importance of keeping clear lines of communication, so they stop everything, listen carefully to your questions or concerns, and are happy to provide answers without obligation. You won’t feel ignored during the process because at The Fast Home Buyers, we aim to ensure you feel good about the deal long after closing. At The Fast Home Buyers, when you make a direct sale, the pros at The Fast Home Buyers walk you through the process. The team at The Fast Home Buyers provides all the services you need in-house at no expense, including attorneys, title and closing professionals, saving sellers like your time and money. You will pay no out-of-pocket expenses when you sell directly and won’t pay commissions, closing costs or broker fees; our offer is the amount of cash you will receive for your property as-is. If you want to learn more, call The Fast Home Buyers at (561) 944-2725.