Home sellers are a busy lot. They need to have their houses listed so that they can generate interest and appeal from possible buyers. Many home sellers are simultaneously preparing for open house showings while also researching different residences and neighborhoods that they would consider living in.
Things can be a bit more complicated if the particular house has been put in an irrevocable trust. In this case, the homeowner has decided to put their assets into a trust that may be irrevocable upon their death. This is usually done to protect those assets from creditors. Once the house has been sold, their designated beneficiaries will be paid a portion of the proceeds from the transaction. Taxes and other debts may also be satisfied by part of the funds raised by the sale of the house.
Such trusts cannot be changed in any way. No modifications, adjustments, or alterations will be considered or allowed. All involved parties must adhere to the rules and guidelines that are included in the trust paperwork.
Selling a home in Texas can take time. Even if you have a highly motivated seller, the sale might not be finished for a few weeks or months. There are certain actions that must be taken in order, several of which may necessitate the involvement of certain specialized industry professionals. There could even be unwanted delays or other problems at various steps. Patience, determination and a proactive plan of action can help you succeed.
Here are a few things that you can do if you’re trying to sell a home that’s in an irrevocable trust:
1. Assign a Trustee
A trustee is a person or a corporation who will be responsible for selling the house. They must also ensure that the proceeds from the sale are distributed to the trust’s beneficiaries according to the instructions that were given by the previous owner who has since passed away.
2. Review the Trust Document
It’s a good idea to read the trust document thoroughly. It should explain who can sell the home. The trustee may be the only person allowed to sell the residence, or it could be up to one or more of the beneficiaries.
It’s possible that ownership of the house could even be transferred directly to the beneficiaries. They could opt to sell or keep the property. It might be possible that a beneficiary would prefer to live in the home or allow their family members to move there.
3. Put the Home Up for Sale
If the house is not retained, it can be put on the market. The seller will usually work with a real estate agent to accomplish this task. They will have the property listed, advertised and marketed. The asking price for the house should be reasonable based on its approximate fair market value. An appraiser may evaluate the house to prepare a determination of what they believe that value to be. The amount that they arrive on should be at or near the fair market value.
4. Start Fielding Offers
Offers should start coming in not long after the home has been listed. Each offer should be evaluated carefully. The seller can reject an offer, accept it or attempt to negotiate with the buyer.
5. Reach Agreement
If an agreement has been reached, a purchase agreement will be created. This is a legally binding document that will clearly spell out the duties and rights of each party. The seller and buyer should read the contract carefully before signing.
The sale may hinge on certain clauses that were written into the contract. For example, it may be contingent upon the buyer’s ability to sell their current residence or upon a home inspection. If the agreed-upon terms are not satisfied, one or both parties may be able to step away from the deal without having to worry about a breach of contract or other legal violations.
6. Continue With the Sale Process
Once an offer has been accepted, the sale will resume just like any other type of real estate transaction. The house will be inspected. A licensed inspector will review the exterior and interior conditions. They will then issue a report with their findings. If significant items are in need of repair or replacement, the parties can discuss them. They could be paid for by the buyer, or the seller or the costs could be split evenly amongst them.
The buyer will also set up an escrow account. They will make a good faith deposit that’s usually a small percentage of the home’s value. The funds will be put into an escrow account where they will be disbursed at closing. An escrow or title agent will establish the account for the buyer.
7. Distribute the Net Proceeds as Needed
All remaining paperwork will be signed and filed at closing. The buyer will be given the keys to the house. The seller will be paid for the net proceeds from the sale. In the case of an irrevocable trust, the trustee will usually distribute the funds to the beneficiaries. This is done based on the stipulations in the trust.
Once the proceeds have been properly released, the parties can go their separate ways. The trustee may have a few documents to finish for tax purposes, but their assignment is mainly over by that point.
You can hire a real estate agent or an attorney who is experienced in real estate law for assistance if you wish. They should have a proven track record and know exactly how this type of sale should be handled. It may take a little extra work and there’s generally more communication involved, but the sale can still be accomplished in most instances.
Just make sure that you stick to the rules that were established in the trust. The decedent probably had a valid reason for placing their assets in an irrevocable trust. They may have wanted to ensure that the home would remain in the family or that their loved ones would have enough funds to live comfortably for several years. It’s also much easier to divide assets, and you shouldn’t have to worry about complaints or too many concerns in that regard. Everyone can return to their normal lives once the proceeds have been disseminated and finally bring that chapter to a peaceful close.
Have Questions? Ask Rene!