When considering the question "can I write my own deed of trust," it is important to understand the legal structure and parties involved in a trust deed. A trust deed is a legal document used in real estate transactions to secure a loan by transferring the property's legal title to a trustee, who holds it as security for the lender until the borrower repays the loan. The main parties to a trust deed are the borrower (trustor), the lender (beneficiary), and the trustee. Each party must be a legal entity capable of entering into the agreement, and if there is more than one person involved as borrower or owner, all must be included to ensure proper legal and financial responsibility.
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Introduction to Deed of Trust
Unlike a typical deed, which directly transfers ownership of real property from seller to buyer in a standard real estate transaction, a trust deed creates a security interest in the property involving all improvements, easements, and fixtures. The process of executing a trust deed is part of the broader real estate settlement procedures, which include preparing and signing the necessary documents, transferring the property's legal title to the trustee, and recording the transaction with the appropriate government office.
A few key differences set a deed of trust apart from a mortgage. While both serve to secure a loan with real property, a deed of trust involves three parties (borrower, lender, and trustee), whereas a mortgage involves only two (borrower and lender). In some states, either a deed of trust or a mortgage may be used depending on state law, which can affect the foreclosure process and property transfer procedures. By understanding how the process differs from a traditional mortgage, property owners can better navigate their loan obligations and avoid complications if a default occurs. For example, a deed of trust typically allows for a non-judicial foreclosure process, while a mortgage may require judicial foreclosure.
The loan transaction itself involves the lender providing the borrower money to purchase or refinance real estate, secured by the trust deed. The borrower signs a promissory note, which is a payment promise or written promise to repay the loan according to specified terms. The trust deed will include various provisions, and such provisions may address payment terms, default conditions, and legal protections for all parties.
Compliance with environmental law is also a key consideration, as the presence of hazardous substances or violations can materially affect the value or security of the property. The trust deed may include clauses requiring the borrower to comply with environmental regulations to mitigate liabilities.
If the property involving the trust deed is owned by more than one person, all owners must be named, and each will share joint responsibility for the loan and property obligations. In the event of default, the lender may have certain remedies, but not such remedies as may be limited by the terms of the trust deed or applicable law.
The governing law section of the trust deed specifies which state's laws will apply to interpret and enforce the agreement, providing legal clarity in case of disputes.
After addressing these key elements, the remaining provisions of the deed of trust will cover additional terms and conditions that govern the relationship between the parties and the management of the property.
Parties to the Agreement
A deed of trust is unique in real estate transactions because it involves three distinct parties: the borrower (or trustor), the lender (or beneficiary), and the trustee. The borrower is the property owner who pledges the real property as security for the loan. The lender provides the funds and sets the terms, such as the interest rate and loan obligations, while the trustee acts as a neutral third party who holds the property’s legal title until the loan is fully repaid.
When a deed of trust is executed, the borrower transfers the legal title of the property to the trustee, but retains equitable title, meaning the borrower can continue to use and occupy the property as long as they meet their loan obligations. The trustee’s primary responsibility is to act impartially and, if the borrower defaults, to initiate foreclosure proceedings according to local laws. This process allows the trustee to sell the property to satisfy the outstanding debt, making the foreclosure process typically faster and less costly than judicial foreclosures required by mortgages, which involve only two parties.
It is important to note that the deed of trust must be properly notarized and recorded at the County Recorder’s office where the property is located to ensure the transfer of legal title is recognized and to protect all parties’ interests. Additionally, the deed of trust will outline requirements such as property insurance, which the borrower must maintain to protect the lender’s investment.
Understanding the roles of each party in a deed of trust is essential for anyone looking to transfer property or secure real estate financing. By knowing how the borrower, lender, and trustee interact—and how the process differs from a traditional mortgage—property owners can better navigate their loan obligations and avoid complications if a default occurs. Always review the terms carefully and consult a qualified professional to ensure compliance with applicable law and local regulations.
Completing the Form
In the first part of our form, you will fill in the relevant names, addresses, and other party information involved in the transaction. Completing such tasks usually takes the longest, but is really just a matter of collecting and entering the appropriate information.
In the next section, you will enter one or more legal descriptions of the property. If you do not have the legal property description already, you can find it easily by contacting your county register or recorder of deeds (by phone or online) and providing the property address or tax parcel number. You can also try looking at previously recorded deeds, tax assessments, websites such as zillow.com, your land title, or asking a licensed real estate attorney for help. If including multiple legal descriptions, begin each new description on a new line.
Next, you will enter the main terms of loan repayment. These are located on the promissory note and will be negotiated by the parties ahead of time. Including this information is for reference purposes only. Briefly outline the main terms of repayment from the promissory note, including the principal amount owed, the interest rate, how interest is calculated (annually, semi-annually, or monthly), the address where payments are to be made, and when the interest adjustment date is, if any. The promissory note should also specify how interest thereon accrues from a certain date until the principal is paid in full. Be sure to include the schedule for periodic payments, and clarify if lease payments or other escrow items are part of such payments. The deed should clearly state the sums secured, including principal, interest, fees, and any other amounts, as well as such debts covered by the agreement.
Lastly, you will have the option of entering any additional terms and conditions you wish to include. This is mainly to allow you to include any non-standard terms that the parties have agreed to. You may want to view the preview first to see the standard terms that have already been included. If you wish to allow modifications or improvements to the property, written consent from the lender or beneficiary may be required. If the deed includes obligations for property maintenance, be sure to specify the borrower's responsibility for such repairs. Any rights or powers not expressly granted in the document are not implied.
Executing the Agreement
To execute the agreement, the parties simply sign and date it in the presence of a notary public or witnesses. Most states just require one notary public to act as a witness. However, two witnesses are required to sign deeds of trust in several states, such as Arkansas and Georgia. These states allow a notary public to sign in the place of one of the witnesses. If any written notice is required at signing, such as informing parties of their rights or obligations, it must be provided as a legal requirement.
Two Witnesses
Note, in ANY state, lenders can still choose to require two witnesses to sign. The main requirements for witnesses are that they are 18 years or older and are disinterested from the transaction, meaning they are not involved and have no stake in the outcome.
Final Steps
Although recording is not always required, it is highly recommended that you do record as soon as possible because it will protect you from potential adverse claims to your title by other parties. Every deed of trust should be recorded with the appropriate local office, usually called the County Recorder's office or County Clerk’s Office. If you are using a title company to handle the transaction or escrow, they can assist with ensuring the deed is properly recorded and all requirements are met. As every county has its own specific filing requirements, we recommend contacting your local office to see if it requires any supplemental forms, whether it has any special requirements you need to complete, and also if you need help writing a proper legal description. Recording fees and other related expenses are considered reasonable costs that the borrower may incur during this process.
Some points to remember when completing your deed of trust:
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Don’t staple multiple pages together unless your local office specifically permits it.
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Leave all margins blank. Our deed of trust sets the margin default sizes at 1 inch except for the top of the first page, which is 3 inches to give extra space for official use only. Your local office will inform you whether you need to vary these sizes somewhat.
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All signatures on the document must be originals and not copied, printed, or stamped.
If you are looking for a convenient way to create your document, consider using a free deed service that allows you to easily generate and download a deed of trust at no cost.
Once signed, witnessed, and recorded, the document is effective. It is a good idea to make sure each party gets a copy of the signed document.
