buying real estate through probate
Hi everyone. so I have some questions about a home that I want to buy. It’s kind of a unique situation because it’s my sisters home, but she passed away without having a will. The home is currently in probate. I have been paying the mortgage for the past two years and we want to keep it in the family if I can get it at a decent price. there are heirs involved but they are minors. my mom is the personal representative. how should I go about this? thanks in advance.
#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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The heirs would inherit it, not purchase it.
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#2 Real Estate Agent Contributor
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Will you pay cash or do you need a loan to purchase?
If cash, then you write an offer to your mom as the representative. The attorney handling the probate can advised on who the seller is. Probably something like the Estate of ....... . Then take it to a title company to process the paperwork, write title insurance and such. Depending on if you are in dependent or independent administration you may or may not have to get the judge to approve the contract. They may also want an appraisal. If you are getting a loan for the home, an appraiser may be done for this process and perhaps you can provide this one to the judge as proof of a fair sale. You probably need to buy at a fair price to the estate as the minors are entitled to a fair sale. Can't be a deal to you and they're getting shafted. Your mom has a fiduciary duty to get them the best price, not to give you special treatment.
Also if there are any creditors to the estate, like hospitals and doctors, or credit card companies or mortgage company or anyone else she owed money to, they have to be paid off.
It should not take two years to clear a probate case unless your sister had some complicated life with lots of assets. Your mom needs to get busy and get the house sold....and distribute any proceeds to the creditors and if any assets left over distribute them to the heirs. Otherwise you may also be eating up lawyer fees too every month.
Probably it is not a good idea for you to be paying the mortgage on a house that is not yours. This money should be paid by the estate. If there is no money in the estate, then the house should be sold ASAP. Often there is a time limit imposed by the state. You probate attorney can and should advise you of this.
You want to take care of this anyway ASAP. It gives you options if you ever want to sell it. You might slip by for now paying someone else's mortgage or living in a house that is in someone else's name, but believe me. The longer this drags on the more complicated it can and probably will get. For example if the mortgage company finds out for some reason, they may call the note due. That means they want the rest of what is owed in 30-60 days or foreclose on the home. You don't want to be forced into that situation.
Good luck and best wishes.
In point of fact, it appears title to the property is still in the family via your nieces and/or nephews, assuming your sister did not have a surviving spouse. While you write your mother is the Personal Rep of the estate, more importantly who is the minors guardians? I believe it is their job to ensure the minors' interests are protected. It also appears you may be a real estate agent which if true may be some additional need for professional advice. You may want to write a contract and submit it to a title agent and see what requirements the underwriter will make to be sure that whatever you do it will result in insurable title. Keep in mind an owner's policy issued to you will contain an exclusion from coverage for any acts of the insured (you) and any matters known to the insured, not of record and not disclosed to the company in writing before closing.