- Step 1:
- The trust deed holder begins their initial exploration into the possibility of selling their trust deed note.
- Step 2:
- After speaking with potential trust deed buyers, the trust deed holder makes their decision about selling their trust deed, selects the best sale option for them, and chooses the company they wish to do business with.
- Step 3:
- The trust deed holder and chosen investor enter into a purchase and sale agreement for the sale of the trust deed note. The agreement will contain the sale price, the number of payments sold and who will be responsible for the expenses necessary to close the transaction.
- Step 4:
- The trust deed buyer will conduct their due diligence necessary to complete the transaction. The due diligence process normally includes the following:
- All pertinent documents will need to be reviewed, including the promissory note, mortgage, deed of trust or trust deed, and the settlement statement from the sale of the property.
- A credit report on the borrower will need to be reviewed.
- The trust deed holder will provide a twelve month payment history on trust deed note, along with evidence when the payments were received.
- The trust deed holder will provide a copy of the homeowner’s insurance declaration evidencing that the collateral property is insured and the trust deed holder is named as an additional insured on the policy.
- A drive-by appraisal on the collateral property will be ordered and reviewed.
- A title search will be ordered and a commitment for a lender’s policy of title insurance must be issued by the title company.
- An estoppel letter will be sent to the borrower verifying the trust deed note terms and the current outstanding balance on the trust deed.
- Step 5:
- When all of the due diligence has been completed by the trust deed buyer, the closing can be scheduled. It is a matter of good business practice for the closing to take place at an attorney’s office or the title company that completed the title search.
- Step 6:
- At the closing the trust deed holder will sign the closing documents and surrender the original trust deed and policy of title insurance.
- Step 7:
- Last but not least, the trust deed holder will receive their sale proceeds from the closing agent via wire transfer or certified check. It is also important for the trust deed seller to request a full set of copies from the closing agent.
These are the typical steps necessary to sell a trust deed note. Every trust deed is unique and therefore every transaction will be unique.
I just wanted to let you know I signed all the paperwork at the title company. I want to thank you for all you did to make this transaction happen so smoothly. You are a true professional. Thank you.
Receive a free, no-obligation quote to sell your trust deed for cash, or contact us at (800) 618-2485 or email John at The Mortgage Buyer.