Basics of Property Management: Screening Potential Tenants

Real Estate Agents and Special Needs Trusts: 2 Things You Need to Know

23 July 2015

Jesse Obrien

When an individual is not capable of making sound financial decision for himself or herself, family members may opt to set up a special needs trust. These types of trusts allow a trustee to make important financial decisions on behalf of an individual with special needs. As the individual ages, it may become necessary for the trustee to invest in the purchase of a home with the money held in a special needs trust.

Here are two things you should be aware of as a real estate agent if you want to work with special needs trust clients in the future.

1. Strive to find homes that can easily be adapted for special needs use.

Physical mobility is an issue for many people with special needs, and housing that can accommodate assistive devices will be especially attractive to a client purchasing through a special needs trust.

As you scour the multiple listing service (MLS) for potential homes to show your client, be sure that you are paying attention to the floor plan of each home. An adult in a wheelchair needs an average of 60 inches of clear floor space to make a complete turn, so open floor plans generally work best for these types of clients.

Understanding how to spot homes that can easily be adapted for special needs use will allow you to serve as a valuable asset to your client.

2. Financing and contract options may vary when you are working with a client who is purchasing through a special needs trust.

Traditional home buyers often take out a loan from their local bank to finance the purchase of a home. These mortgages allow home buyers to invest in a property now and pay off the balance of the purchase price of the home over time.

Special needs trustees may have a difficult time qualifying for a traditional mortgage; In many instances it is more beneficial for the trustee to use money generated by the trust to purchase a home outright.

You must also advise your special needs trust clients to ask for an appraisal contingency when making a cash offer on a home. Including this clause in the contract makes the purchase of the home dependent on whether or not an appraisal shows it has been listed at (or below) current market value. An appraisal contingency will protect special needs trustees from paying too much for a property.

Working with a client who has been appointed the trustee of a special needs trust will require a bit more preparation and planning on your part. As an agent, you should be able to locate properties that can easily be adapted to meet the trust beneficiary's physical needs and guide the trustee through the appraisal contingency process to protect the trust's investment.

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