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 find yourself in the position of trustee with responsibility for conducting 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 that can hold up a sale or add extra expenses to the process:

1. Not having all trust documents up-to-date and available.

If the trust has been in place for awhile, a complete set of documents could include more than just the original trust. Changes, amendments and associated documents could be part of the package. Normally the listing broker will ask for these documents when the listing agreement is signed and escrow will ask for them when an offer has been accepted. Trustees may want to meet with the attorney handling the trust and make sure they have a complete package before the property is listed.

2. Not using the proper trust real estate sales forms.

Most REALTORS^® with experience selling trust property know which forms apply specifically to trust sales. Using the wrong forms can require replacement of the incorrect forms and delays if any forms are missing. Hiring a broker familiar with trust sales is usually fix this mistake.

3. Not conducting a proper inventory of the property. 

A property inventory identifies 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, 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 could be a more profitable selling strategy).

The process for conducting trust real estate sales can be as simple as selling property owned by an individual or family – only an attorney can advise you regarding specific requirements of the trust that relate to property sales. If you have any comments or questions regarding the real estate brokerage aspect of 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.