My father was selling a house that he had refurbished, on a personal contract with the buyer, when he died. The house and purchase agreement was left in his simple living trust, and as trustee, I have to handle it. This house is in Oregon. My father was an attorney, I am not.
When I buy a house that is financed by a bank, the house is in my name with the bank holding a lien (is that correct?).
But in this case, the house still seems to be in the trust’s name, and the only thing protecting the buyer is the purchase agreement with my father (does that sound plausible?)
So when the purchase amount has been paid, what is my process to turn over the property to the new owner (I hope I live that long, it looks like being another 21 years)? Do I sign over the deed, something like signing a car’s pink slip?
They have homeowner’s insurance, and I would be notified if it lapsed. I make sure the property taxes get paid. They are responsible for maintenance and repairs. Anything else I need to watch out for?
The particular details of the purchase agreement (and of your dad’s trust as well) are likely to matter too much for you to be able to get a meaningful, trustworthy answer here. Given how much a house is presumably worth, this is an instance where it would be worth it to invest in some actual legal advice. The trust aspect is the more specialized element here, so your best bet is probably to look for a probate lawyer near the property in Oregon who advertises doing other general services like real estate closings as well. They should be willing to do a free consultation and to give you a ballpark figure for the likely cost of the legal expenses.
Disclaimer: This is not intended to be legal advice and should not be taken as such. I am not your lawyer. This is just anonymous cross-talk.
You will convey the title to the new owners … and the instrument of conveyance will be recorded down at the County Seat … like signing a car’s pink slip …
This is confusing. It sounds like your father gave the buyer the house (at least let the buyer use it) and was getting paid for it slowly over time?
Yikes. Listen to Tom and get a lawyer in Orgeon who knows probate. You’ll probably also after that need one who knows real estate; they could be the same person.
This is similar to a “Land Sales Contract” … perhaps confusing but definitely screw-ball, the Oregon courts have been having a terrible time dealing with the complaints that arise out of this arrangement … right now, my leading company has title to my rig, I’ll get the title when I make my final payment with the lending company’s name removed …
We tried this back six months ago here in Oregon and interestingly enough, it was the Title Insurance company who refused to underwrite the sale … so we switched to the more common title transfer and warranty deed arrangement …
I would suggest trying to talk to an escrow officer and/or a real estate broker first … on the cheap … with so much of the law in flux, some lawyers are not as up-to-speed as they should be … I have $5,000 worth or Land Sale Contracts in hand that I might as well throw away … fucking lawyers …
By the way, I suggested a probate lawyer because the terms of the trust might affect the handling of the property. Depending on how long the trust is designed to last, the trustee might be called upon to distribute its assets to the beneficiaries before the land sale contract expires.
Disclaimer: Still not an attorney-client relationship.
That’s correct. Shortly after they signed the purchase agreement, the husband went on disability and their income now doesn’t allow them to re-finance through a bank.
The buyer is living in the house while they pay for it, the title of the house remains in the hands of the trust (so they were not given the house). They were originally (reliable) renters, so they already lived there. If the buyers stop paying, I have always presumed the trust could re-take possession, probably after some expensive legal occurrences. I’m not clear why you find that such a disturbing concept.
The trust is a simple living trust, and does not have an expiration built into it. At some point, however, the two beneficiaries (me and my sister) are going to die (or the buyers are), and I’d like this to be resolved before then. I fear distribution of the assets after that point will only make money for more lawyers.
I appreciate the advice about lawyers. It’s a little awkward living in another state 600 miles away and having no other occasion for visiting the area. I’ve never even met these people, only talked to them over the phone once or twice, and corresponded through regular mail (apparently they don’t do email). They really are, I believe, just scraping by, and we don’t mind giving them a leg up by making their payment terms easier.
It sounds like your father “sold” the property under a “land purchase contract” or “installment sale”. Does the legal agreement have those words at the top or in one of the first paragraphs?
In any event, you have a handle on how it should work. You maintain ownership of the property until it is fully paid off. At that point, you transfer the deed to the buyers. It’s actually a fairly beneficial setup for the seller, as you don’t need to go through foreclosure if the buyers quit making payments.
But I agree with the advice above. Find an Oregon lawyer who is familiar with both real estate, trusts and estates (probate). He can look over the trust documents and this installment sale and give you legal advice. Since you probably don’t know any lawyers there, perhaps start with the local Chamber of Commerce for references. Or since your father was a lawyer, maybe you do know about lawyers there.
I’m sorry I wasn’t very clear. I don’t find the arrangement disturbing, and think it could be a good solution for both of you.
But it is unusual. Unusual enough that you probably won’t get good advice from random amateurs on the internet who haven’t seen the contract. My ‘yikes’ was at the thought of one of us random amateurs trying to say anything worthwhile about it.
The technical term for what is commonly called a land contract is “contract for deed”, and laws concerning them vary from state to state.
Here’s an article that tries to explain pros and cons for both buyer and seller.
One risk to the seller that the article doesn’t mention is the buyer could damage the property and then back out. Sure, the seller gets it back easier, but may have a harder time reselling it.