In previous articles, I discussed the unique sales procedures and forms used when selling real estate owned by trusts1 and estates in probate2. I’m following up with a broker’s perspective on the 3 most common mistakes when selling California real estate owned by a trust. If you ever find yourself in the position of a trustee with the responsibility of selling trust-owned real estate, I hope you will avoid these mistakes and have a smooth sale.
Here are the 3 most common trust sale mistakes:
- Not having all trust documents up-to-date and available. If the trust has been in place for awhile, this could include changes, amendments and associated documents that were developed after the trust was originally established. Normally the listing broker will ask for these documents when the listing contract is signed, but often the listing goes forward while the trustee scrambles to assemble this paperwork before an offer is accepted and escrow needs it NOW.
- Not using the proper sales transaction forms (as identified in my previous articles). These forms serve several purposes, one of which is to inform the trustee of which disclosures to provide. Hiring a broker familiar with trust sales is usually the fix for this mistake.
- Not conducting a proper inventory of the property. A property inventory will identify 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 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 or unattached fixtures, 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).
Selling California real estate owned by a trust is usually a smooth procedure. But if you have any comments or questions about selling California real estate owned by a trust, I’d appreciate hearing from you. For information about the trust and probate real estate services we offer, click here: Services For Real Estate In Probate Or Trust.
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.