Selling your deed of trust note is a streamlined & easy process

If you’ve entered into an owner financing scenario, but don’t want the responsibility of having to deal with a long-term loan, you may need a trust deed buyer. With that in mind, here is what you need to know before starting the buying process.

At their core, trust deeds are security instruments that can be used in real estate transactions. They work in combination with a promissory note, or a promise to pay. as a way to allow the buyer to borrow money from the lender in order to purchase the home. Depending on state law, trust deeds may be used in place of mortgages. However, these instruments are also commonly part of owner financing transactions.

Unlike mortgages, which are solely an agreement between the borrower and the lender, Deeds of trust involve three parties. In particular, there is the trustor, the trustee, and the beneficiary. They each play a role in the real estate transaction that is as follows:

Trustor

Put simply, the trustor is the person whose assets are being put into a trust. In this case, the trustor would be the borrower because the title to the home, which signifies ownership of the property, is what is being held in trust until the loan is paid in full.

However, it’s important to note that even though the buyer will not receive legal title to the property until the loan is paid, they still hold equitable title to the property. In real estate, holding equitable title means that the borrower is still able to enjoy the rights that come along with owning the property, including  the right to live there on a regular basis and the right to gain equity in the property as they pay down the loan.

Trustee

Next, the trustee holds the legal title to the property while the borrower is making payments on the loan. Typically, the trustee is a neutral third party, such as a title company. That said, regardless of who is chosen to fulfill the role, they will have three main responsibilities in the transaction:

• If the borrower decides to sell the home early, the trustee will be responsible for paying the lender the amount that is due on the loan and distributing the rest of the proceeds to the owner.
• If the borrower should default on the loan, it will be the responsibility of the trustee to handle selling the property in order to help the lender be repaid.
• Once the loan is paid in full, it is the trustees’ responsibility to dissolve the trust and transfer the legal title for the property to the owner.

Beneficiary 

Lastly, where trust deeds are concerned, the lender is usually considered to be the beneficiary. However, in the case of an owner financing and transaction, it could also be the person selling the property. Essentially, the beneficiary is the person whose interests are being protected by the trustee.

Selling your deed of trust is a straightforward process that can be completed in just a few steps:

• Compile the key details of the deed of trust you intend to sell
• Submit your information to a qualified buyer for a complimentary valuation
• Review the offer and determine whether it aligns with your financial goals
• The purchasing company conducts due diligence, including underwriting and property verification
• Upon completion, funds are disbursed and you receive your lump sum payment

Wondering where to begin when selling a deed of trust? The process is simpler than most sellers expect. Start by collecting all relevant documentation to request a free deed of trust quote. You will need the property address, the outstanding loan balance, the interest rate, the remaining term, and the borrower’s name. If any of this information is unavailable or you have questions, our team is available by phone to walk you through it.

From start to finish, the typical deed of trust sale takes between 15 and 30 business days. The timeline depends on factors such as the property’s location, appraiser availability, and the speed of the title search. Amerinote Xchange covers all transaction costs on our end — including the appraisal, BPO, and title fees — so there are no out-of-pocket expenses for the seller.

The foreclosure process will be handled differently, depending on whether you have a deed of trust or a mortgage. Ultimately, state law will determine how the foreclosure is handled. However, in most cases, mortgage states will follow a judicial foreclosure process while a deed of trust states will opt for nonjudicial foreclosure.

As their name suggests, judicial foreclosure involves using the courts to facilitate the foreclosure process while nonjudicial foreclosure does not. Instead, trust deeds often have a power of sale clause included in them, This clause gives the trustee the power to sell the home if the borrower defaults on the loan.