With more homeowners converting property into family trusts, LLC’s and other partnerships flipping houses, who owns the property is now an issue that needs to be confirmed ASAP.
We find in our practice about 5% of the individuals who signed the contract, have no right to sell the property, the signature does not match the vesting deed, or it’s missing additional required signatures based upon the instructions of the LLC or partnership.
What’s the big deal?
1-You’ve got to have the right names/entity on the contracts/disclosures BEFORE you prepare the paperwork. What if you don’t? You’ll need to re-prepare the documents and have the seller re-sign!
2-You’ve got to have the right person signing the documents who has the authority to sign/sell the property! What if you don’t? You’ll need to re-prepare the documents and have the right seller sign documents and complete disclosures (Like the Transfer Disclosure Statement)!
Get it right the first time! Contact your favorite escrow/title company and request a copy of the vesting deed. This tells you who the legal owner is.
Next, confirm the information with the seller. Ask these questions;
“Before I prepare the listing paperwork, I need to know how you are holding title. I also want to confirm the spelling of your first and last name.”
“Is the property held in a trust?”
“Are you the trustee/partner/authorized signer and is there anyone else who is part of the agreement besides yourself?”
“What is the title of the Trust/LLC/Partnership/Corp?”
Once you have confirmed ownership-then it’s time to prepare the paperwork and get the right signatures from the right people.
There is one more step! The escrow officer will need copies of Trust/LLC/Corp before the seller signs closing papers to determine who has the authority to sign and sell the property. We always start working on this as soon as soon as a listing agreement is signed because there can be delays getting approval.
Don’t waste your and team members time! Confirm the person signing the contract has the legal authority to do so.