Posted by Marty Weisberg on December 10, 2000 at 09:07:20:
Geoffrey,
You obviously need to protect yourself. There are easier ways to do it. Just keep in mind that when you make an offer you should only do so if you believe you can perform. The sale of a property to a motivated seller is a very important thing and you shouldn’t make the committment lightly.
Having said that, you can can put clauses into your contract that will let you out of it. For instance:
Buyer to have 15 days to inspect and approve of property’s physical condition.
This offer is subject to the written approval of my partner to be given within 15 days.
You can use as many different weasal clauses as you can think of. I wouldn’t use more than one per offer.
You can also do an option instead of a contract and that will protect you.
Here I am happily sleeping tonite when suddenly in my dreams an idea comes to me. Well, I don’t know if I can do this so it keeps me awake for another half hour before I decide to go down to the basement to ask you folks.
Let’s say that there is a house on 123 Main St. that I want to make an offer on through a Realtor.
Can I create a 123 Main St. Land Trust and sign the contract as Trustee?
I.E. Is it possible for the performance of the contract to be tied to the TRUST rather than to ME as an individual?
Posted by B.L.Renfrow on December 10, 2000 at 11:52:43:
I have on a couple of occasions created a trust in which to take title to a property where there is no subject-to involved. Why? Anonymity. Period. Not in order to be able to get out of a deal, but rather so every Prying Paul and his lawyer can’t easily figure out what properties I hold an interest in. I name myself as beneficiary, but name an out-of-state associate as trustee. After the trust is created, then my trustee names me as co-trustee with power of management. Thus, I can sign all documents as co-trustee, BUT my name appears nowhere on public record.
There are no doubt more clever and more complicated methods to hide my interest, but this is simple, easy and effective.
And while purchase contracts may be in my name initially, my agreements are assignable. And guess who the assignee is? On the VERY rare occasions where I make offers through Realtors, I make the offer in my name and/or assigns. Then I simply assign my interest to the 123 Main Street Trust, which is how I take title. Of course, this won’t fly if you’re using a conventional lender, since they will want you to take title in your own name. In this case, you’d have to transfer title to the trust AFTER closing in your own name, thus losing the benefit of anonymity, since there’s now a paper trail with your name on it.
But if there’s no conventional lender making you a loan, it’s a great way to keep everyone from easily discovering your interest.
However, if your goal is to find a way to weasel out of a contract without personal liability, don’t do it. It’s not worth the damage to your reputation which WILL occur if you make agreements you don’t honor. If you need time to market the property, first make SURE it’s a good deal going in, then just include a reasonable inspection contingency. But please don’t go tie up some desperate seller’s property for any length of time without any idea whether you’ll be able to fulfill your promises.
Posted by Marty Weisberg on December 10, 2000 at 07:30:45:
Geoffrey,
Yes, you absolutely can. What is the purpose? Who is going to be the beneficiary? Remember the liability with a trust, other than for misdeeds of the trustee, lie with the beneficiary.
Heh. Probably doing something I shouldn’t be. Trying to avoid any potential problems in case I’m not able to find a buyer when I make an offer and sign a contract to buy from the seller.
