Buying a house in probate
Flipper/Rehabber · Lake Worth, FL · Member since 2015 · 53 posts · 22 votes
I found a house that an heir is really motivated to sell, but is in probate. I think I've heard that houses often can get sold before the probate is over. How do I go about this deal? His family also owns houses in other states and countries as well. Any advice?
The answer to your questions is "It depends."
In our recent situation, my husband's mother passed away and he inherited her real property. Her lawyer had arranged for her to use a "lady bird deed." This helped my husband avoid probate of the property. Once he received a death certificate, he went down to the county recorder's to have the certificate recorded. Title passed to him directly. Instead of a "quit claim deed" or a "warranty deed" the notes in the records say "certificate of death." From there, he had full rights to sell the house.
I'm (hopefully) attaching two websites that have more information. You may want to do this deal with the help of a real estate lawyer, rather than a title agent.
http://info.legalzoom.com/transfer-real-property-a...
http://www.nolo.com/legal-encyclopedia/florida-pro...
"In Florida, there are three ways to settle an estate. Here’s an overview of each one, from the simplest and least expensive to the most complicated and costly.
A note about wills: Whether or not probate will be necessary, Florida law requires that anyone who has possession of a will must file it with the local circuit court within 10 days of learning of the death. If a probate court proceeding is necessary, the court will determine whether or not the will is valid.
Many assets of the deceased person may be able to go to their new owner without probate court approval. The most common kinds of nonprobate property are:
For a look at common probate-avoidance techniques, see our articles on “How to Avoid Probate.”
When the deceased person leaves very little behind, this process lets someone who paid for the person’s final expenses—the funeral and expenses of the last illness—be reimbursed from the assets of the estate. (Fla. Stat. 735.301.)
It can be used only when:
To request reimbursement, you file a form called “Disposition of Personal Property Without Administration,” which is available from the clerk of the court and on many Florida circuit courts’ websites. There’s a small filing fee; call ahead or check the court’s website to find out the exact cost.
The document must state how much you’ve spent, and you must document those expenses by submitting itemized bills and receipts for funeral bills and for medical expenses that were incurred during the last 60 days of the deceased person’s life. You must also state exactly which assets (a bank account, for example) you are requesting payment from. A certified copy of the death certificate must accompany the request. If there’s a will, it must also be filed with the local circuit court.
This probate shortcut can be used by many Florida estates. It’s an option if either:
To start this process, the person who was nominated in the will to be executor, or anyone who inherits property, files a document called a Petition for Summary Administration. The surviving spouse, if any, must sign and verify the petition. If any beneficiary doesn’t sign the petition, you must formally deliver (serve) that person with notice that you have filed the petition. (Fla. Stat. 735.201.)
In the petition, you state that the estate qualifies for summary administration, list the deceased person’s assets and their value, and state who inherits which assets.
The court doesn’t appoint a personal representative (executor or administrator) for the estate. Instead, the court, if it determines that the estate qualifies for summary administration, issues an order, releasing the property to the people who inherit it. You might use this court order to show a bank, for example, that you are the rightful inheritor of the funds in an account it holds.
If the estate doesn’t qualify for a simpler method of administration, formal probate may be necessary. These proceedings begin when the executor nominated in the will, or another interested party, asks the circuit court to be appointed as personal representative of the estate. Generally, the probate proceeding takes place in the county where the deceased person was living at the time of death Beneficiaries and heirs (people who would inherit in the absence of a valid will) are given notice, so they have a chance to object.
The court issues a document called Letters of Administration, which gives the personal representative authority to settle the estate. If there’s a will, it must be filed with the court and proven valid. This may be done by having the witnesses to the will give statements, under oath, about its validity. Or, if the will is “self-proving,” it’s enough to submit the document itself. Under Florida law, a will is self-proving if the witnesses, when they watched the will-maker sign the will, signed a statement in front of a notary public. (Fla. Stat. Ann. § 733.201.)
Under the court’s supervision, the personal representative gathers and inventories assets, pays debts and taxes, and (eventually) distributes what’s left to the people who inherit it. The personal representative must submit a final accounting to the court, showing what the estate contained, how the assets have been managed, and the plan for distributing them to beneficiaries. Anyone who objects to the accounting can object in court.
After everything has been distributed, the personal representative files evidence (receipts) with the court, and asks that the estate be closed. The court issues an order closing the estate and relieving the personal representative of further responsibilities. Typically, the whole process takes six months to a year.
For more about formal probate, see the Florida Bar Association’s pamphlet on probate.
Florida is one of the few states that sets out, in its statutes, lawyers’ fees that are presumed to be reasonable for estates of a certain value. (Fla. Stat. Ann. § 733.6171.) The fee is based on the value of the assets that go through probate, plus any income they earn during the probate proceeding. The value of homestead property is not counted.
Here are the statutory fees:
These fees are only for “ordinary” services. Anything the lawyer does that isn’t ordinary—for example, handling a will contest or giving tax advice—is presumed to justify a larger fee. If a lawyer follows the fee schedule, the fee may be almost unrelated to the amount of legal work done. It’s the same amount of work to handle a $1 million brokerage account as it is to probate a $100,000 account—but under the statutory fee schedule, the bill for the million-dollar account would ten times larger.
Florida attorneys aren’t required to follow this fee schedule, and many acknowledge that it often leads to inflated attorney news. Especially if the estate you’re handling is greater than $100,000, be sure to find an attorney who will quote you a flat fee or work at an hourly rate."
You need to talk with the person who can make the deal work. This is the Personal Representative. Is the person who is motivated to sell also the person who *can* sell? If so, you may have a fine deal ahead of you.
We have purchased one probate where both parties had passed away and no heirs could be found. The house was listed on the MLS. We bid on it via our Realtor, and then went to court where a judge approved our offer. We also inherited a house when my mother-in-law passed away. My husband was the only heir, and also the PR and could have sold the property, either by carrying a mortgage back for a new buyer & getting a stream of income, or by having the new buyer get cash or a new mortgage. We chose to rent that house out on our own behalf. It took us 7 months to clear the house out, and we had to make her mortgage payments during that time. This is how other people who inherit property become motivated, and it isn't always the moment after a person passes...it might be months before the house is ready to be sold.
Keep talking with the motivated seller, and confirm they can sell. All the best~
Ok great! I'll go to the courthouse tomorrow and find out exactly who the PR is and then give him a call back. He does want to sell though. One last question @Kerry Baird if he is the PR can he sell the house prior to the probate being over?
Hey Angus! Thanks man for the advice. I'm aware who I need to seek out. I used to go to the courthouse myself and get the probate list. My question is: once I know who the personal rep is, can the house be purchased before the probate is completed? @Angus Reed @Jayden W. @Kerry Baird
Hey Angus! Thanks man for the advice. I'm aware who I need to seek out. I used to go to the courthouse myself and get the probate list. My question is: once I know who the personal rep is, can the house be purchased before the probate is completed? @Angus Reed @Jayden W. @Kerry Baird
Since I'm based in Ny and I don't want to give you the wrong answer I reached out to one of my connects. According to my connect usually you have to wait until probate ends in the state of Florida. I recommend finding a local probate attorney that offers free initial consultations.
Also make sure to perform a thorough title search prior to purchasing. Perform your DD
The answer to your questions is "It depends."
In our recent situation, my husband's mother passed away and he inherited her real property. Her lawyer had arranged for her to use a "lady bird deed." This helped my husband avoid probate of the property. Once he received a death certificate, he went down to the county recorder's to have the certificate recorded. Title passed to him directly. Instead of a "quit claim deed" or a "warranty deed" the notes in the records say "certificate of death." From there, he had full rights to sell the house.
I'm (hopefully) attaching two websites that have more information. You may want to do this deal with the help of a real estate lawyer, rather than a title agent.
http://info.legalzoom.com/transfer-real-property-a...
http://www.nolo.com/legal-encyclopedia/florida-pro...
"In Florida, there are three ways to settle an estate. Here’s an overview of each one, from the simplest and least expensive to the most complicated and costly.
A note about wills: Whether or not probate will be necessary, Florida law requires that anyone who has possession of a will must file it with the local circuit court within 10 days of learning of the death. If a probate court proceeding is necessary, the court will determine whether or not the will is valid.
Many assets of the deceased person may be able to go to their new owner without probate court approval. The most common kinds of nonprobate property are:
For a look at common probate-avoidance techniques, see our articles on “How to Avoid Probate.”
When the deceased person leaves very little behind, this process lets someone who paid for the person’s final expenses—the funeral and expenses of the last illness—be reimbursed from the assets of the estate. (Fla. Stat. 735.301.)
It can be used only when:
To request reimbursement, you file a form called “Disposition of Personal Property Without Administration,” which is available from the clerk of the court and on many Florida circuit courts’ websites. There’s a small filing fee; call ahead or check the court’s website to find out the exact cost.
The document must state how much you’ve spent, and you must document those expenses by submitting itemized bills and receipts for funeral bills and for medical expenses that were incurred during the last 60 days of the deceased person’s life. You must also state exactly which assets (a bank account, for example) you are requesting payment from. A certified copy of the death certificate must accompany the request. If there’s a will, it must also be filed with the local circuit court.
This probate shortcut can be used by many Florida estates. It’s an option if either:
To start this process, the person who was nominated in the will to be executor, or anyone who inherits property, files a document called a Petition for Summary Administration. The surviving spouse, if any, must sign and verify the petition. If any beneficiary doesn’t sign the petition, you must formally deliver (serve) that person with notice that you have filed the petition. (Fla. Stat. 735.201.)
In the petition, you state that the estate qualifies for summary administration, list the deceased person’s assets and their value, and state who inherits which assets.
The court doesn’t appoint a personal representative (executor or administrator) for the estate. Instead, the court, if it determines that the estate qualifies for summary administration, issues an order, releasing the property to the people who inherit it. You might use this court order to show a bank, for example, that you are the rightful inheritor of the funds in an account it holds.
If the estate doesn’t qualify for a simpler method of administration, formal probate may be necessary. These proceedings begin when the executor nominated in the will, or another interested party, asks the circuit court to be appointed as personal representative of the estate. Generally, the probate proceeding takes place in the county where the deceased person was living at the time of death Beneficiaries and heirs (people who would inherit in the absence of a valid will) are given notice, so they have a chance to object.
The court issues a document called Letters of Administration, which gives the personal representative authority to settle the estate. If there’s a will, it must be filed with the court and proven valid. This may be done by having the witnesses to the will give statements, under oath, about its validity. Or, if the will is “self-proving,” it’s enough to submit the document itself. Under Florida law, a will is self-proving if the witnesses, when they watched the will-maker sign the will, signed a statement in front of a notary public. (Fla. Stat. Ann. § 733.201.)
Under the court’s supervision, the personal representative gathers and inventories assets, pays debts and taxes, and (eventually) distributes what’s left to the people who inherit it. The personal representative must submit a final accounting to the court, showing what the estate contained, how the assets have been managed, and the plan for distributing them to beneficiaries. Anyone who objects to the accounting can object in court.
After everything has been distributed, the personal representative files evidence (receipts) with the court, and asks that the estate be closed. The court issues an order closing the estate and relieving the personal representative of further responsibilities. Typically, the whole process takes six months to a year.
For more about formal probate, see the Florida Bar Association’s pamphlet on probate.
Florida is one of the few states that sets out, in its statutes, lawyers’ fees that are presumed to be reasonable for estates of a certain value. (Fla. Stat. Ann. § 733.6171.) The fee is based on the value of the assets that go through probate, plus any income they earn during the probate proceeding. The value of homestead property is not counted.
Here are the statutory fees:
These fees are only for “ordinary” services. Anything the lawyer does that isn’t ordinary—for example, handling a will contest or giving tax advice—is presumed to justify a larger fee. If a lawyer follows the fee schedule, the fee may be almost unrelated to the amount of legal work done. It’s the same amount of work to handle a $1 million brokerage account as it is to probate a $100,000 account—but under the statutory fee schedule, the bill for the million-dollar account would ten times larger.
Florida attorneys aren’t required to follow this fee schedule, and many acknowledge that it often leads to inflated attorney news. Especially if the estate you’re handling is greater than $100,000, be sure to find an attorney who will quote you a flat fee or work at an hourly rate."
Hello Marco:
In addition to the great advice already submitted, here’s a suggestion: Since you are familiar with the courthouse, I suggest you make a visit to the probate division with that case in mind. When looking at the file, here are a few things to look out for: The Petition will show the name and address of the person applying to be Personal Representative- that’s your contact person, not the heirs. The PR will be eventually given an Order authorizing him/her to dispose (sell) the property. That’s your new best friend! Now look to see where did the owner die, i.e. in what state?; that will determine where the first application for probate is made. Since you mentioned that the owner had properties in other states, that process slows the pace for the estate to be settled as the settlement process goes through each state beginning with the state in which the owner died and or was domiciled. However, that ‘slow process’ can sometimes push the Personal Representative to become motivated to sell the properties to be able to settle debts that an estate incurs while decisions are being made for its legal disposition. It is very important that you reach out to the PR after you read the court documents to see like I said where the first probate application will be made. Many Florida properties have out of state owners, and some of these Florida properties carry on-going HOA fees etc. so prepare an ‘elevator pitch’ speech to explain to the PR that it would be a great idea to ask the court for an early order to sell the Florida property to avoid ‘financial bleeding’ like HOA fees and taxes etc. In other words, find reasons to show the PR why it is necessary –NECESSARY- not better to sell the property sooner than later. Good luck, also quick note, an intestate estate (without a will) that has more than one property and several heirs usually has to be liquidated to be able to divide/allocate to heirs- it is just easier to deal out cash than properties.
OK: Here it comes.. I am not an attorney, so this is not legal advice. When you look at the court documents also make a note of the PR’s lead attorney’s name and address for you to contact also. It appears in the files under “Denotes lead attorney”. Good luck.
Claudette
@Kerry Baird Thank you for the wealth of information! It was very informative. @Claudette Attride thank you as well. The elevator is pitch about the financial bleeding is gold! The seller wanted to know if it was possible and I promised him I would have the answer. I informed him of the process. What I found out is that the probate is in the very beginning stages and the decedent only has 2 heirs so I'm just going to keep in contact with the seller. Thanks a lot everyone! I'll let you all know how it goes.
@Marco Petit I definitely recommend you keep in contact and setup a regular reminder to reach out to the seller. I've dealt with probate sellers that I have had to keep in contact with for 18 months after our initial conversation that turned into a deal and I have also sent direct mail for over a year before a seller finally contacted me. In both situations, the deals were very lucrative. Follow up is key!
thank you. Throughout my time I've learned to always keep touching the sellers.