Trust sales and probate sales are basically the same thing in the context of both meaning that the owner of the home has passed away and that is why the asset it being sold. The main difference between the two is how and if the court is involved.
If we are looking for the easier and simplest way for the seller to sell his home, a trust sale would be it.
A lot of homeowners place their homes into a trust, and this is a smart move when it comes to ease of sale once the owner has passed away and in fact this way requires no special action from the buyer side, so it’s a win win for everyone.
In real life what this means is that there are plans in place in advance on what to do in the event of the owner passing away, this will usually be with basic and easy to understand instructions that are kept within the trust on how to settle the estate.
This is the biggest advantage of using a trust sale as it will bypass the court system which we all know can be complicated and lengthy, it will also save a lot of money to the seller by doing so.
How a trust operates
In a trust sale, there is usually one person who is the decision maker which is called the trustee. The trustee is the person who is authorized to sell the home in these cases.
Note – In the event there are multiple siblings that act as trustees, they will all have authority and will need to decide together. This will most likely won’t affect the buyer as they will debate and decide what to do before the home is even on the market.
From our experience, in situations where there are multiple trustees, it’s best to resolve all questions and decisions before putting the house on the market. We have done this many times in the past with no issues.
A probate sale is an event where the homeowner has passed away and there is no trust. This means the court system will handle the sale of the asset, this process complicates the sale and can range from six months to two years.
With a probate sale, the fees for the attorney and administration are all based on a statuary fee schedules that the court itself sets.
Compared to trusts, where the fees are calculated on an hourly basis, however, trusts give more flexibility on passing ownership to siblings or children. Depending if there is a loan on the home or not, and if the children are underage then the person getting ownership will need to hold the property for the benefit of the minors until they reach adult age.
This also provides the trust with the time needed to sell the home at the perfect market conditions.