Does a Trustee Deed transfer ownership?

Question

We are looking to submit an offer on a SFH held in a trust.  One of the statements seller has said must be in our offer is the following:

"Conveyance of this property shall be by TRUSTEE DEED subject to taxes, easements, restrictive covenants and encumbrances of record unless otherwise agreed"

Questions are:

1.  Does the Trustee Deed transfer ownership of the property?

2.  Does the Trustee Deed provide clear title like a warranty deed?

3.  Can I get title insurance to protect us?  Or how can we protect ourselves from missed taxes, loans or liens as I understand that trustee deed does not provide the protection.

The property is in Indiana and the Trustee (Regions Bank) is located in Wyoming.  They are saying we can select a title company to close but they are using Dominion Title for trust related manners.  Buyer may chose to close elsewhere but then we will have a split closing.

Any information that can be provided is appreciated.

Account Closed · Answer

It simply says they wound up with the property through a foreclosure action. The Trustee Deed is different from a Warranty Deed. A Trustee Deed says they will guarantee the Title from the date they took it back but can't for sure know what other claims might be out there. It does Convey (Transfer) Title. Out West we use "Special Warranty Deed" for foreclosures that went through the sale. If a Title Company will issue Title Insurance on it, then it shouldn't be any problem. Just read the "Exceptions" and see if there is anything you don't understand, then ask an attorney. It's rarely an issue.

Dan Perrott · Answer

@Elina Solaita - checking into it further, the seller will provide clear title and provide the title insurance even if they are using a trustee deed.   The Trustee deed does transfer ownership, clear and insured.

Offer was submitted today.  We now wait on a response which may take a week (corporate bank overhead as they will need to have a Trustee board meeting to review the offer).

Elina Solaita · Answer

@Dan Perrott

How far are you in contract? I’m in a situation with someone that was in this situation. If you have provided the title company your earnest money, they should have provided you a preliminary report of the title. It should tell you in that report some of the things you are asking. Hopefully. Otherwise, I have no idea.