Sales involving property become part of public record. The deed that is recorded with a town and/or county becomes information that sits within public domain. In other words, virtually anyone can quite easily search for your property, either online or in a hall of records where such documents are kept and find your name, eliminating privacy.
Some situations arise where homebuyers require that their names are kept off record. The reasons can be quite varied and while not common, it is something that becomes a necessity during a real estate transactions.
There are several routes that a real estate buyer can take to ensure privacy is maintained on a purchase. In this blog, we explore some of them.
According to Investopedia, a revocable trust is a ‘part of estate planning that manages and protects the assets of the grantor as the owner ages.’
By vesting a title within a revocable trust, homeowners can achieve privacy in a pragmatic way. Most homeowners need financing, and revocable trusts can obtain financing from a lender. The result is a home sale where the trust is listed as the buyer rather than the names of the parties that the trust pertains to.
Limited Liability Company
It is possible to purchase property through a limited liability company (LLC.) to preserve privacy. This is not very common, however, since it is harder to secure a loan as an LLC and most home buyers require financing. The caveat here is if the transaction is being handled in cash where financing has been removed from the equation or if the property at hand is commercial property.
Realty trusts are another tool that buyers can use as a way to purchase real estate privately. They are quite similar to LLCs in that they are mainly used as part of a cash transaction or by commercial property buyers (including buyers interested in rental units.) Like LLCs, realty trusts can also have difficulty securing financing. If a buyer is solely interested in privacy, it is unlikely this will be the preferred route to maintain privacy.
No matter your reason for privacy and how you decide to proceed, it is essential to seek the advice of an accountant and seek legal counsel. No decision should be taken without deep consideration and consultation with professionals to ensure you are proceeding in a way that preserves your best interests. Not doing so may result in serious legal, financial and/or tax consequences.
Principle Abstract is one of the area’s most trusted title insurance providers and conduct each transaction with the interests of the buyer in mind. If privacy is a priority to you on an upcoming real estate transaction, give our office a call and a member of our team will be happy to assist you.
Ready to get started? Give our office a call today.