Finding the right way to navigate the world of real estate can be very tough and exhausting. Not knowing where and how to find your way in this can leave one confused. Whether you are looking to get the right information on selling your house with a deed of trust or here to get help, we have you covered.
It is crucial to find the right information on this topic as this is also a massive concern among sellers who want to sell their house with a deed of trust. There are large number of complexities in this process, but, do not worry as we are going to make it very simple for you.
Here we will provide you with all the information you need.
What is a Deed of Trust?
Firstly, let’s understand what exactly is deed of trust. Well, deed of trust is a document which legally ensures safe and secure real estate transaction. This transaction happens between two parties, one is the borrower and the other one is the lender.
This is quite similar to a mortgage agreement where there is a lender as well. It is also important to note that during the process, there is a third party trustee who holds the property title. This property title is held by the third party trustee during the loan period.
Deed of trust is the same document that is held by the third party till the entire loan is returned by the borrower. It is also an excellent way to secure finance.
Although, it seems like the process of selling the house with a deed of trust is very hard. But we are more than confident to tell you that, with the right information, the entire process can be very easy.
There are alot of things that are mentioned in the deed of trust and some of the details it mentions are loan amount, loan terms, total loan left, property description, names of the three parties, and late fee information etc.
Other details may be like the defaults in the payment. It is also important to note that the borrower is not the owner of the property in this case and only the equitable share is held by the property. Borrower has the ownership once all the loan amount has been paid back to the lender.
Third party in the Deed of Trust
Third party in the deed of trust is the company which holds the title of the property. They act as intermediaries between the lender and the borrower.
This third party also hold the right to sell the property if the borrower is not paying or has failed to pay the loan to the lender on time. They can also be called a neutral body in this entire process.
Can you sell a house with a deed of trust?
Yes, you can sell a house with a deed of trust. Although, the house can be sold with a deed of trust but it is very important to note that the process is a bit different from how normally houses are sold where there is no deed of trust.
The deed of trust is also an arrangement which ensures that the interest of lender is secured and this is exactly why the third party trustee steps in the process by being a bridge for both the borrowers and the lenders.
When a seller decides to sell the property, the first step that is essential is to get the lender’s approval. Taking into account the lender’s agreement, the property is then sold afterwards and lender gets the amount that was given to the borrower to buy the property in the first place. After this, the property title is transferred to the new owner of the property.
When the seller decides to sell the house and the lender approves to sell the house, there are two essential documents that would be a must to include the entire process.
Main two documents that are needed for the seller to sell the house with a deed of trust:
– Deed of trust
– Promissory Note
Promissory note is basically like payable note that the loan borrower gives to the lender which provides a guarantee that the loan will be paid as per the conditions decided between the two parties. This promissory note also mentions all the terms of the loan. In this process, third party hold the property title deed.
The appointed Trustee is responsible for ensuring the appropriate dispersion of the money. With similar processes to a mortgage, all funds from the sale of a house will first be used to pay off the loan amount outstanding to the beneficiary (the lender). It will also ensure that any remaining proceeds will then go to the borrower.
Why Deed of trust is preferred over mortgage?
Deed of trust is preferred over mortgage due to many reasons. It has benefits for both the lender and the borrower. For lender, deed of trust provides a more safer process and they can count on the third party if the borrower make any default during the loan period.
This helps them avoid any kind of payment default. For borrower, it also provides a safe way for loan repayment because a third party is involved and this party makes sure there is no breaching of loan terms from the lender side as well.
So, in many ways, deed of trust is much better than a mortgage as it has a bridging party in between which continuously look over the entire process.
Conclusion
Now that we have covered everything you need to know, it is also time to assist you. If you live in Virginia and looking out for someone to handle all of this process, HR Property Doctor has you covered. We have been in this business for a very long time now, and with an experienced team of professionals, our commitment to work is what we are proud of.
HR Property Doctor ensures it provides its clients with the best services in the market. From making sure the deed of trust is legit to ensuring the entire process is smooth, we make sure to provide you with the best experience and always take full responsibility.
For selling or purchasing the property with a deed of trust, book a consultation right now with us and experience the best real estate services in the town. Our team of professionals are always ready to help you and turn your decisions into informed ones.