Dealing with probate issues in an estate sale (Chicago)

Dealing with probate issues in an estate sale (Chicago)

Real Estate Professional · Chicago, IL · Member since 2015 · 7 posts · 1 vote
Hello Forum, Well it seems I find myself in a situation. I have a contract for my first fix n flip up in the air. I have saved around 100k and have the house locked in for 57 with about 25 in repairs and an arv of about 145k. In late February we had the contract and the second week of March we had the closing. At the closing table we were just getting ready to finalize the deal and we came across a bit of a let down. The sale was an estate sale, the parents died in 1978 and left the house to their 10 children. The head of the estate had to fight in court at the time because of a dispute among the siblings at that time. He was granted to be the head of the estate however in fine print the title company saw that it was "supervised" meaning a judge has to approve of him selling the house since they have to make sure all beneficiaries get their equal share of the money. So the closing wasn't able to be done. The attorney the sellers for the sale is not the same attorney they used back in 78 so it took like two weeks to send him a letter to be able to release the case to the new lawyer ( this is my understanding from what I was told). Since then we are now two months from that original closing date and the sellers lawyer is "working on it". They offered an articles of agreement where we pay 500$ a month and its reduced from the final amount when we finally close for deed. However, I'm not sure if that's a wise decision considering that I'm paying the taxes and on top of that if I start working on it and I invest all this money I could end up not getting the deed. Or I could be stuck waiting for them to deal with this and keep paying holding costs since I can't sell the property until this issue is resolved. I would be at the mercy of the sellers lawyer and the slow court system. I'm new to this so I just want to know what my fellow bigger pockets investors advise? Thank you in advanced.
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  • Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
    10y

    What is your primary concern?

  • Bulawayo, Zimbabwe · Member since 2015 · 1k+ posts · 253 votes
    10y

    s...the confirmation by the court is for the equal distribution to the beneficiaries not whether the sale should go ahead or not.since its a fix and flip, there is no rental income.......i would suggest speaking to your lawyer as to how well protected are you by the articles of agreement

    If you were to go ahead, fix it then hold it to earn rental income while waiting for title(specific performance)?

  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    10y
    Originally posted by @Alan Gomez:

    I'm new to this so I just want to know what my fellow bigger pockets investors advise? Thank you in advanced.

    I would not put any $ into the property. I would cancel the contract w/ return of all EMD. Write up a new contract contingent on the owners resolving the situation. The new contract should have a provision that allows you to cancel at any time prior to the resolving the situation. Then go look for another deal. If you find the deal cancel this one.

  • Real Estate Professional · Chicago, IL · Member since 2015 · 7 posts · 1 vote
    10y
    My main concern would be whether or not it's safe to go ahead and start working on the house if I sign the articles of agreement, or just wait it out. It's been two months and I honestly don't know how long these issues take to be resolved. My lawyer has a relationship with their lawyer so i would think that would benefit us knowing how things are moving along but it seems it's been the exact opposite. I just keep getting the run around on the situation with unclear answers on when they will resolve the issue. The original contracts closing date was for March 14 and we did not sign any extension. They're still holding earnest money so I would figure were still good to go on the deal.
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