Tuesday, May 23, 2006

How to Close Using a Land Trust

Using land trusts are a great way to flip or assign property in cases where you cannot assign a contract (e.g., REOs). It also avoids double closings, and thus, double fees.

Step:
(1) Sign offers as "John Smith, trustee" (use your real name obviously)
(2) When buyer is found, fill out trust agreement with him as beneficiary and collect your assignment fee
(3) Create a Memorandum of Trust (used to file trust at Clerk's office)
(4) Closing: sign all documents same as above (buyer brings the money to escrow)
(5) After closing: Resign as trustee (one-page document)
(6) Buyer can designate his own trustee later (another one-page document)
* Note documents in steps 5 and 6 are not recorded anyway; just between you and him.
(7) Optional: Use a quit claim deed to take your trustee name off of the title.

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