What Is a Fiduciary Sale?
A fiduciary sale is carried out through a contract under which the debtor transfers the revocable ownership of an asset to the creditor.
Fiduciary sale: the security behind all real estate financing
When you take out a mortgage on a property, in practice it serves as “collateral” for the bank until you pay it off. This is called a fiduciary sale—and it has almost entirely replaced the traditional mortgage in the market, because it can be enforced much more quickly in the event of default.
How It Works
You (the debtor) retain possession of the property, but the creditor retains a “resoluble” lien on it until the debt is paid in full. If you fail to pay, the creditor can transfer ownership to his name and put the property up for auction—without the need for a lengthy legal proceeding.
Why This Is Good for You, Too
Because the security is stronger, banks offer lower interest rates and better credit terms for transactions involving a fiduciary sale than for standard mortgages.
Are you going to finance it or buy it with a trust sale?
Contact Tettu.