You find the right home only to learn that a family trust, not an individual, owns the property. That may raise questions about whether the purchase will differ from a traditional real estate transaction.
In California, many homeowners transfer real estate into revocable living trusts as part of their estate planning. When a trust owns a property, the trustee signs the sale documents on the trust’s behalf. Most of these sales follow the same process as other real estate transactions, although they may require additional documents before closing.
What to verify before making an offer
Before making an offer, buyers can expect a trust-owned sale to involve a closer review of certain documents and ownership records. Buyers, escrow officers and title companies will usually examine the following:
- The trustee’s legal authority to sell the property
- Whether all trustees must approve the sale
- The title report for liens, easements or ownership defects
- Whether the property was transferred into the trust
- Whether escrow will require a Certification of Trust
Together, these documents help establish who has the authority to complete the sale and whether the property’s ownership records support a clear transfer of title. Identifying questions early in the transaction can also reduce the likelihood of delays before closing
Issues that can complicate the purchase
Most sales involving a family trust close without major problems. In some cases, however, questions arise when a successor trustee recently assumed responsibility for the trust or when title records do not match the current ownership.
The transaction may also take longer if multiple trustees must approve the sale or if escrow or the title company is waiting for trust documents. Resolving these issues before closing helps keep the transaction on track.
What this means for your home search
If you come across a property owned by a family trust, it does not necessarily mean the purchase will be more difficult than any other home sale. Instead, you can expect the transaction to include a few additional steps to confirm who has the authority to sell the property and that the ownership records support the transfer.
Knowing what to expect before making an offer can help you better understand the process and the documents that may become part of the transaction if a trust-owned property is the right fit for your needs.
