Seller financing enables you to work with your buyer to find satisfactory terms and conditions for both parties, which comes with financial perks.
If you opted for seller financing when acquiring your Texas raw land, you likely had to appoint a trustee to take temporary ownership of the real estate until the transaction is finalized. You may decide to change the trustee on your seller-financed raw land beforehand, which requires you to follow a specific legal procedure.
To change the trustee on a seller-financed raw land sale in Texas, you must be the seller and not the buyer. You must obtain the official Promissory Note and Deed of Trust documents for the State of Texas, appoint a new trustee, and submit all documents to your local county clerk.
Seller financing is an excellent way to purchase raw land, and it can be mutually beneficial to the owner and seller, but you need to ensure that you relinquish ownership of the property once all payments and agreements have been concluded. A trustee is appointed to serve as the middleman during a seller-financed raw land sale. This is done to guarantee that the conditions of the deal are finalized according to the contract agreed upon by both parties. Texas has specific laws, such as the SAFE Act Licensing Requirement, which must be adhered to for seller financing deals to be legitimate. In addition, Texas requires that a trustee hold the deed instead of the seller to confirm that contract is properly carried out by both parties. Aside from this, the process of conducting a seller-financed raw land sale is quite similar to most other states. To help you understand this further, we are going to take a closer look at how to change the trustee on a seller-financed raw land sale in The State of Texas.
After extensively researching Texas property laws, I have been able to gather enough information to determine the process of changing the trustee on a seller-financed agreement. My research has indicated that for a trustee to be changed legitimately, all documents must be filled out correctly and submitted to the county clerk of your local area.
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Who Can Change the Trustee on a Seller Financed Raw Land Sale in Texas?
Before you make any changes to the documents in your seller-financed raw land sale, it is important that you understand who can actually alter the trustee.
The only person involved in the seller-financed agreement that can legally change the trustee is the lender. The lender is allowed to change the trustee at any time that they want - whether it is for personal reasons or dissatisfaction with legal services. This does not make changes to the seller financing agreement between the buyer and the seller.
With that being said, the lender or buyer is not allowed to make these kinds of changes. The lender or buyer has no say in who the trustee is for the seller-financed raw land sale. They are bound to stick with the agreement regardless of who the trustee is so long as the contract is carried out legally.
Trustee Changes on Seller Financed Raw Land in Texas
In 2005, Texas initiated a new procedure for seller-financed agreements for acquiring land. This resulted in the introduction of a trustee to the seller financing process. The main reason for this was to protect the buyer and confirm that the agreement was observed by a third party that does not have any ties to the property.
There are circumstances in which the trustee of seller-financed land needs to be changed. As we mentioned, the only person that is allowed to make these changes is the seller and legal owner of the land. This has to be the same name that matches the dead of the raw land.
To fulfill the process of changing the trustee on your seller-financed raw land deal, you must carefully follow Texas’ legal process. You need to obtain specific documents that are only credible in The State of Texas, which can be found at your county clerk's office or through legitimate online services that specialize in seller-financed documents.
To make alterations to the trustee on your seller-financed raw land sale, you must obtain a Promissory Note for The State of Texas. This is the initial document that was used to begin the seller financing agreement between you and the buyer. It will list all of the conditions and agreements between both parties and it serves as the contract for the seller-financed raw land deal.
Since you are making alterations to the initial document, you must notify the trustee that you appointed to the original contract and let them know that you are making changes. Once you confirm with your legal office that you will alter the trustee, you can commence appointing a new one.
A new Promissory Note must be filled out and you will need to follow the steps that you took with the initial document. You can obtain this from the legal office that you work with or by utilizing an online service that provides the document.
Since you are only changing the trustee involved in the seller-financed raw land sale, all other conditions and terms must be left exactly as they were when the contract was first written. This means that all interest rates and transaction prices must stay the same - unless otherwise agreed upon by the buyer.
Deed of Trust
The deed of trust is the document used to declare ownership of raw land. As the legal owner of the parcel, your name will be listed on the deed of trust.
However, when you agreed to a seller financing contract for your raw land deal, you handed over your deed of trust to a service. The trustee that you appointed would have been listed on the deed and you will need to create a new deed of trust to change the trustee.
You need to declare another lien on your deed of trust for the document to be legitimized. Make sure that you work with a credible legal office that can appoint you a trustee that you can count on to finalize your seller-financed agreement.
Obtain the correct documents for The State of Texas. You can do so by visiting your county clerk or by locating the correct deed of trust documents through a reliable property authority in Texas.
Print out the documents and list an approved trustee on the deed of trust. Double check that all information is filled out correctly for the deed of trust to be legitimate. This requires you to have all signatures signed by the parties involved - including the trustee.
Submit Documents to Texas County Clerk
With all of your documents in hand, you must submit them to your local Texas county clerk. It is essential that you hand over all documents to the country clerk that the property is located in and not to a clerk in a different county - otherwise, the documents will be void.
A lot of raw land owners prefer to fill out their deed of trust document at the county clerk's office. If you are not confident in your ability to accurately provide all legal information to the clerk, leave the documents blank and bring all necessary information with you to the office.
Work with your local county clerk to fill out the deed of trust properly before submitting it. Provide the clerk with the information about the new trustee of your seller-financed agreement and hand over the documents.
After you submit the deed of trust with the updated trustee, the county clerk will finalize the process and approve the document.
About THE AUTHOR
Brittany has been in the land business since 2020 when the world was starting to shut down. Since then, we’ve sold to dozens of people from ATV weekend warriors to camping enthusiasts to retired truck drivers. Our inventory spans mostly in the western United States. We’ve been trained by experience, land acquisition courses, and hundreds of hours meeting with county assessors and clerks, zoning officials, realtors, and land investors. We’ve answered hundreds of questions from people regarding the buying and use of land.Read More About Brittany Melling