Deeding the Title and seasoning issues

[Paul Elya]

Hello all,

I've been browsing this forum for a long time but this is my first post. I would appreciate any help you can give me. Ok so like many of you I've been investing in short sales and buying under a land trust. In some cases when it's necessary, we'll have the property deeded over from the seller to the land trust so that when the end buyer runs a title search for financing the land trust shows up as the owner on record. The problem is many sellers are concerned with the idea of deeding over their property before the closing, because they are afraid of being left without the ownership while still holding the note.

My idea to hopefully relieve the sellers of some of their concerns is to have the sellers sign a deed to the land trust and then have another deed that is held in escrow with a lawyer of title company that deeds the property back from the land trust to the seller if something were to go wrong. Wanted to know if what your thoughts are? What I really need to do is write an agreement of what would constitute the second deed being released from escrow back to the seller.

I know that's a mouthful, but any idea's as to what should be included in this agreement? Or if that idea is even worth pursuing.

Thanks
Paul

[Justin S.]

Here is how the land trust method works in a nut shell.

1. Homeowner deeds the property to trust where they are the beneficiary of the trust. (A RE transaction)
2. The investor (you) will negotiate the loan payoff's.
3. You pay off the loans and then become the beneficiary of the trust. (A non-RE transaction)
4. The original homeowner is now free of liens and free of title.
5. Your end buyers purchases the property and the deed held in the trust is transferred to the end buyer. (A RE transaction)

The homeowner still owns the property as long as they are beneficiary of the trust. That is how you tell them the property is secure. I have never used this method, but that was how it was explained to me.

Good luck.