Problems with In Trust Offers

27 January 2016

In Strong real estate markets, we tend to see more ‘in trust’ offers.

What is an ‘in trust’ offer?

In trust offers occur when one person buys a property ‘in trust’ for someone else. It sounds simple enough but there are a few problems that can arise.

  1. The first problem is the seller does not know who ‘that someone’ else is.
  2. The second problem is that the buyer named is not liable for the contract either.

Our company does not except ‘in trust’ offers, and neither should you.

If someone wants to represent or front another buyer, there is another solution...Let them buy it in their own name. Let them be personally liable to perform and close the contract. Then allow the buyer to transfer his interest to the undisclosed buyer just before closing in the lawyer’s office. It’s simple and you get to protect the seller.