The real estate market in Tennessee works by certain rules. Once you have gained knowledge of these rules, you can use them to your advantage. One of the most commonly misunderstood details of the process is known as a trust deed. This is a document that comes into play on certain occasions that involve home sales.
What is a trust deed?
A trust deed is a document that is commonly called upon for use in matters related to real estate, including real estate closings. This type of deed is useful to document the process whereby one party takes a loan from another party in order to buy a property.
The point of a trust deed is to document an official agreement between the borrower and the lender involved in the transaction. The property listed in this document will be held in trust by an independent and completely neutral third party. This will remain the status quo until the loan has been paid off.
Why are trust deeds useful?
The need for a trust deed may come into play during the final closing process of a home sale. If this is the case, you will be well advised to obtain one before you sign the property over.
There are many states in the nation, including Tennessee, where a trust deed can at least temporarily take the place of a mortgage. This can result in a much more equitable relationship that allows a borrower to pay back the loan in a more timely fashion.
Many people find the process of obtaining a trust deed to be faster and more cost-effective than applying for a mortgage. If you have the income to guarantee the repayment of a loan obtained through a trust deed, this arrangement may well be preferable.
