A deed of trust is the security instrument that allows the property to be sold in order to satisfy the debt if the buyer defaults on his promise to pay. It would be extremely unusual for a seller to accept a promissory note without requiring a deed of trust as security. In the event of the buyer’s default, the seller would be an unsecured creditor and would have to pursue any legal remedies through the courts, whereas with a deed of trust the seller would simply foreclose through a non-judicial trustee sale.
A seller MIGHT be willing to accept an unsecured promissory note if it were for a very small amount.
Relative selling me a rental. He will loan me the money. Can I just draw up a quick promissory note or do I have to have a Deed of Trust prepared.
What are the advantages and disadvantages of each?
Just spoke to attorney and was shocked by fees for prep of sales contract, deed, deed of trust & note, and Recording the deed. How much of this really requires an attorney? Pls keep in mind this is a close relative, he will not try to give me a raw deal nor I him.
You can probably accomplish the whole thing with the help of your title ocmpany closer. Yes you need a note and the deed of trust, all the docs. you mentioned in order to effect this sale if seller is carrying for you. It may be true in your case, but just because you are familiy doesn’t mean someone can’t get messed over–it happends all the time. And get title work too–wouldn’t trust my mother to know if the title is clear or not.
Thanks for the reply! Is a Deed of Trust a legal requirement? Or can a simple promissory note suffice if agreeable to the seller? Thanks in advance.
Bill