In a previous article, I discussed Tips For Buying Real Estate Sold By An Estate In Probate or Trust, which provided guidance for buyers in trust real estate sales. This article provides helpful tips for avoiding the most common mistakes made by sellers (trustees). If you ever find yourself in the position of trustee with the responsibility of doing a trust real estate sale, I hope you will avoid these mistakes and have a smooth transaction.
Here are the three most common trust real estate sales mistakes:
1. Not having all trust documents up-to-date and available.
If the trust has been in place for awhile, this could include changes, amendments and associated documents that were developed after the trust was originally established. Normally the listing broker will ask for these documents when the listing contract is signed, but often the listing goes forward while the trustee scrambles to assemble this paperwork before an offer is accepted and escrow needs it NOW.
2. Not using the proper trust real estate sales transaction forms.
These forms serve several purposes, one of which is to inform the trustee of which disclosures to provide. Hiring a broker familiar with trust sales is usually the fix for this mistake.
3. Not conducting a proper inventory of the property.
A property inventory will identify what is being sold as either real property (real estate) or personal property. When the value of personal property is significant, buyer and seller may want those items identified on a separate Bill Of Sale and their value not included in the price of the real estate. Typical items placed on a Bill Of Sale could include furniture, expensive decorations or unattached fixtures, garden tools, lawn mowers/tractors, and large stocks of consumable cleaning, lawn care or pool maintenance supplies. The value of pre-paid services that are sold with a property could also be shown on a Bill Of Sale, such as an annual home warranty or security system monitoring contract that conveys to the new owner (note: pre-paid services can also be credited to the seller in the final escrow figures, though arranging to buy pre-paid services at a discount and then selling them with the property at full value is a more profitable selling strategy).
The process for trust real estate sales is usually very similar to selling property owned by an individual or family. Not making the basic mistakes noted above will help to reduce the stress and increase the profitability of trust property sales. If you have any comments or questions about California trust real estate sales, I’d appreciate hearing from you. For information about the trust and probate real estate services we offer, click here: Probate Real Estate Services.
Note: This is not a legal review of trust administration procedures and no legal opinion is offered. Always consult with a qualified attorney for advice on trust formation and administration.