Buying Property from only living heir, did not go to probate.

10 Replies

Hi BP, I have come across a deal for a property where the owner of record on the deed is deceased.  My direct marketing campaign led me to the daughter of the deceased owner.  There was no will, and the daughter says all other heirs are also deceased.  The daughter has tried to sell the property before, I verified with the title company she was working with.  

The issue was that the daughter did not have enough money to go through probate.  This is what she told me, and this is a new situation for me.  The daughter is highly motivated to sell, and there is a potential $19k upside to wholesaling this property.  

So how can we move forward?  

If i paid to initialize probate on the daughter's behalf, how can I guarantee, that she will sell to me?  

I cannot place any lien on the property as the deed owner does not owe me anything.  And the title company said, the process to get the title transferred can take up to 6 months.  

Could I place the property under contract for over a 6 months, but if another living heir is found, then I could potentially lose out.  Any Probate experts out there that have experienced this situation?  

@Victor Noriega

I frequently run into this very scenario. Get the home under contract with the only known heir signing.  Then get the contract to the title company so they can run their search and tell you exactly what they will need from the heir to close the deal. You don't need to be an expert because the only opinion that counts in this situation is the title examiner's. Use them to your benefit. If the contract isn't valid because you find there are other heirs, then  you have what you need (information) to get the ball rolling on the other heirs.

To answer you other question, yes, you can set an extended closing date but you can't have an option period that exceeds 180 days or the contract becomes executory in nature. Just reserve yourself the right to terminate using other language in special provisions. If you find there are other heirs, the contract is moot anyway since the other heirs have not executed the contract.  

Hopefully those much smarter than me can help @Rick H. but since probate was never opened, no powers were given to anyone, therefor sole heir or not, she doesn't have any signing authority to sign anything enforceable to "tie up" or get the property in contract. I'd suggest possibly as one option, walking her through getting probate opened, petitioning for special powers to be able to put a loan against the property. Then any money you give her to help is secured against the asset. Then if heirs show up, you aren't in an equity position, you are a secured lender and win whether you buy it or not. 

Hey! Just got my 400th post as a member since 2008!

@Derek W.

@Victor Noriega

A contract doesn't need to be legally binding or enforceable to have a title company run a title search in Texas. The ONLY purpose of using my preferred method is to keep the buyer from incurring the expense typically charged by title companies if not contract is provided when seeking a title search. 

It sounds like Texas and California are different enough, I better bow out of advice. 

What @Guy Gimenez said. I would add a little something from personal experience: I had a property under contract that the lady had inherited from her deceased mother. Her attorney advised that she use a Quiet Title action to transfer title since the house was the only asset in the estate. Problem was...I didn't have title run until the Quiet Title was completed. Turns out she had $8k of judgments against her that became liens on the property as soon as the Quiet Title was completed putting her in title. If I had run title first I would have found those judgments and would have had the attorney shift gears to do a probate instead. I could then purchase the property from the Estate of her mother and the judgments never would have been an issue. Lesson learned.

Originally posted by @Derek W. :

It sounds like Texas and California are different enough, I better bow out of advice. 

Title will run the report and say they need a court order and/or affidavits or whatever from the seller.  Texas has some heirship deeds and affidavits, I think.  So depending on value and what title wants/needs, it may not be as complicated as a full blown probate.

That being said, it's the same in TX and CA in terms of submitting a purchase agreement to  the title company.  An illusory contract (one signed by someone without deeded interest) will work just as well as a good one to get title to run a report.  

This deal really can't go down as a wholesale deal unless you have cash, and time.  If it were me, I'd control the deal by checking out the heir situation and, if indeed, the daughter is the only heir I would buy her interest via assignment.  I would then deal with the title issue the cheapest and fastest way.  Whatever works in Texas. :)

I would know and understand as much as possible about the debt issues.  I'd also be sure as hell there is no Medicaid debt.  

If you don't have the skill or cash to work this lead (as most wholesalers don't), consider working with someone in your area who does.

Victor,

Did you ever resolve this?   I run into this all the time on small vacant land properties, where they are willing to sell but they don't have any money to pay an attorney to help them get the property in their name.

I passed on this deal. The numbers did not support its purchase. The seller wanted $10k and the assessed value was at $15k. This property was hard to validate as there was no other properties for sale nearby. The seller mentioned someone offered $40k for the property once the probate issues were resolved. However the seller would never produce the name or contact information. On top of this the seller asked me to front the lawyer cost for probate fees. I said I was unable to do this.  I kept in contact and the seller never moved forward with an attorney. I even called an attorney referral service and gave them the contact info. I even posted a elance job to see if an attorney could provide some assistance at a discounted rate. However the seller would not budge on their $10k and kept asking me for a personal loan. Our last conversation ended with me telling them I had done all I could and they needed to follow up with one of the laywers to resolve it. 

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