Selling a property held in a trust can be a complex process. There’s several things to keep in mind to ensure the sale goes smoothly. Lucky for yoy, this article will outline nine key steps you need to take to successfully sell a property held in trust.
Let’s dive right in!
1.Consult with the Trustee
In case of the original owner’s death or incapacity, a trustee is in charge of administering the trust. You need to consult with the trustee to see if they approve of the sale. You may need to go to court to get permission to sell the property in case they do not.
If you are the trustee, you need to make sure that selling the property is in the best interest of the beneficiaries and that you have their approval.
Either way selling a house in a trust after death isn’t easy, and it’s best to hire a real estate lawyer to ensure everything goes smoothly.
2.Determine the Value of the Property
You will need to have the property appraised to determine its value. This is important for two reasons. First, you need to know how much money you can expect from the sale. Second, the trustee may have restrictions on how much money can be paid for the property.
People usually tend to underestimate the value of their property. An appraisal will provide you with an objective opinion and help you set a realistic price for your trust property.
In most trust selling cases, the trustee has the final say on what the property is worth.
3.Find a Real Estate Agent
It is strongly recommended that you hire a reputable and experienced real estate agent when selling a property held in trust. The agent will be responsible for marketing the property and helping you find a decent buyer. They will also negotiate on your behalf to get the best price for the property.
Also, they are the ones that will answer all your questions about the selling process, which, let’s be honest, can be really confusing. The agent’s commission will be paid out of the sale’s proceeds, usually around 5-6%.
When looking for a real estate agent, make sure to interview several candidates. Ask them about their experience with selling properties held in trust and see if they have any good references. Don’t forget to check their online reviews too.
4.Prepare the Property for Sale
Once you have found an agent, they will help you prepare the property for sale. This includes making any necessary repairs, staging the property, and taking care of the paperwork. It is important to make sure the property is in good condition before putting it on the market. This will make it more attractive to potential buyers, help you get a better price for the property and sell it sooner.
If you are in a hurry to sell the property, you may be tempted to skip this step. However, it is important to remember that the sale of a property held in trust can take longer than a regular sale and that skipping this step might actually do you more harm than good.
5.Sign the Sales Agreement
Once you have found a buyer for the property, you will need to sign a sales agreement – a legally binding document that outlines the terms of the sale. When trust houses are sold, the trustee is usually the one who signs the sales agreement.
It is important to review the sales agreement carefully before signing it. Make sure that all of the terms are acceptable to you and that the price is fair. If you have any questions about the sales agreement, be sure to talk to your real estate agent or lawyer to clear the air.
6.Close on the Property
After the sales agreement has been signed, you will need to close on the property. This is the moment when the buyer pays for the property and takes complete ownership of it. Closing can take anywhere from a few days to a few weeks.
During this time, the buyer will arrange for a home inspection and finalize their financing. Once everything is ready, you will meet with the buyer at the closing table to sign the final paperwork and hand over the keys.
At this point, the sale of the property held in trust is complete, and you will receive your payment.
7.Debts and Fees
It is important to remember that, as the seller, you are responsible for paying any outstanding debts on the trust property. This includes the mortgage, taxes, and homeowners insurance. You will also need to pay any due real estate commissions and fees.
If any additional money is left after all debts and expenses are paid, it will be distributed to the trust’s beneficiaries.
8.Selling a House in a Revocable Trust
If the property is held in a revocable trust, the selling process is quote simple. This is because the trustee has full authority to sell the property without getting approval from the court or beneficiaries, which can take time. However, even in this case, it is still recommended to use a real estate agent to help with the sale.
The trustee will sign the sales agreement and all other paperwork when selling a property held in a revocable trust. The proceeds from the sale will be distributed according to the terms of the trust.
9.Selling a House in an Irrevocable Trust
When selling a property that is in an irrevocable trust, the trustee will need to get approval from the court and all beneficiaries before proceeding with the sale. This is because an irrevocable trust is a legal entity that is separate from the trustee and beneficiaries. As such, the trustee does not have full authority to make decisions about the property without input from those involved.
The court will review the proposed sale and ensure that it is in the trust’s best interests. The trustee will sign the sales agreement and all other paperwork if the court approves the sale. The proceeds from the property will be distributed according to the terms of the trust in this scenario too.
Sell Your Trust Property with Ease
Selling a property held in trust can be a complex and time-consuming process. However, with the help of a real estate agent, a lawyer, and our insider tips and tricks listed above, you can do it relatively quickly and, most importantly, successfully.
Just remember to take your time, do your research, and carefully review all documents before signing anything.
Good luck with your sale!