[WSBARP] Seller financed and transferring title prior to payoff...pitfalls?

[Teena Williams]

That is all very convoluted. In a real estate contract, title is not transferred to buyer until the contract is paid off in full and it is done via a "fulfillment deed" (the contract has been fulfilled).  If there is a Note and Deed of Trust recorded, then title has already changed to buyer but lender holds a security interest in the property (DOT) until the note is paid off. That is then released from title via a request for reconveyance to the trustee and recording of a reconveyance by the trustee.

It is unclear which scenario PC actually has because it cant (or should not) have both an unfulfilled contract and a Note and Deed of Trust.


Teena Williams
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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Timothy Lehr
Sent: Wednesday, January 21, 2026 8:23 AM
To: wsbarp at lists.wsbarppt.com
Subject: [WSBARP] Seller financed and transferring title prior to payoff...pitfalls?

All,

I have a PC seller that sold a property on a seller financed RE contract a number of years back. There's an executed promissory note and deed of trust. The RE contract contemplated a fulfillment deed to be recorded when the balance is paid by buyer. There is still a balance owed, but seller wants to assist buyer by transferring title now so buyer can apply for flood insurance. Insurance company is saying she can only apply if she is the title holder.

Any pitfalls, considerations, or problems if seller transfers title now and keeps receiving payments via the promissory note?

Thanks,

Timothy C. Lehr
Attorney & Partner

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