Maybe someone can clear this up for me a little bit. I've been doing some searching but it's still a little hazy. There is a property I'm interested in that has been abandoned for a few years now. A childhood friend of mine grew up in the house so I recently asked him if they were interested in selling it but he said when his grandfather passed away there was no will so it couldn't be sold. The property is in Louisiana and I believe that means all children would have a stake in it. I searched the property on the parish's property locator and two names pop up. I'm not sure if this is his grandfather's name or not but someone has been paying the property taxes. The house isn't doing anyone any good sitting abandoned and I think they just don't know the process necessary to sell the property or don't have the funds for an attorney. If anyone has experience with a situation like this I'd love to hear your advice.
@John Lewis I'm not sure what the law is in Louisiana, but there are laws here that allow people to pay delinquent taxes on a property and eventually assume ownership. I would look into this as a possibility as well, because it could make your already complicated situation a little more complicated. Good luck sorting this puzzle out!
The lack of a will is irrelevant and the attorney who opens Succession (probate) could be paid from the assets of the estate. If the house has some equity then one of the heirs should step up and take the lead here and get this process started.
Would recommend going to local parish land records. Search for any liens against property. Did it go to tax sale? Someone's paying the taxes. Does it have any code enforcement fines? Etc.
Then I would advise having that heir open succession with an attorney. Basically money from the sale of the property would cover all liens and attorney costs. For example. Say you purchase it for $10,000. After all liens and attorney fees have been paid, the excess goes to the heirs. Depending on how many there are. So it's important to know if there is debt against the property and if so, how much that debt is. You can also call some local probate attorneys in your area to ask for a free consult. Ask them about their fees associated with such a transaction. Go from there. Best of luck!
This process and your effort should start with a purchase agreement. Get that and then go to a title company/attorney and be prepared to spend about $2-3k for a succession. Who pays for that is negotiable. It can be paid by you, out of the proceeds of the sale or by you in addition to the amount you offer. I normally consider it a closing cost that is not a normal closing cost and it comes out of the seller’s proceeds at the closing.
Liens against the property are only part of your concerns. Judgements against any owner/heirs is another concern. That’s why you just need to get it to a title company/attorney and let them answer those questions for you. Be prepared that it might cost you $500-600 to find out that you have what will cost much more than the average numbers I stated above. You may not be willing to risk or able to negotiate that higher cost with the seller.
The person you talk to and get a contract with, can’t close the deal without the succession being completed, but you need a contract to start the process. Whoever you deal with, make sure all money changes hands through the title attorney.
@Robert Leonard Interesting advice. What purpose does the contract serve until all heirs are discovered/known and all agree to the terms of sale? Perhaps what you are saying is this may somehow protect the buyer from getting screwed on the expenses.
No, nothing protects the investor from spending money to find out the facts of who has an ownership interest and will they all agree to sell? The contract is what starts the process of getting a title attorney to do the work of finding out if there are heirs or judgements that affect the property. Unless the buyer is a private investigator, it’s worth the potential cost to hire the title company to do the investigating related to the title of the property.
If the seller puts a sign out in front of the property and signs contracts with 2 or 3 different “buyers.” If they are in a rightful position to sell the property, the first contract is “first in line” to buy before the others. If you didn’t have a contract and you went and hired somebody or spent the time doing it yourself, what happens when you show up a week or two later and say, “I’m satisfied that there are no liens or potential title problems. I’m ready to buy it,” BUT somebody else came yesterday and put it under contract? That would leave you wasting time and any expense for a property you just missed.
So the plan is to open title with an unenforceable sales contract and have the attorney do the preliminary legwork, likely with zero pay if the deal dies on the vine... Sign Me Up!
Come on @Tom Gimer , did you read the second paragraph of my original post? Zero Pay? I said to be prepared to pay $500-600 to for those services for a deal that might not work out. Maybe I’m rephrasing that a little clearer here now?
What is the difference if a seller lies to you and says there are no other owners? Should I go out and try to find out if there are any others with an ownership interest in a property every time I get one under contract? Or will the title attorney be the one who, in the regular course of their business, finds that out and either shuts down the person trying to sell what they can’t or brings in the others for their rightful share of the proceeds?
If some attorneys don’t want to take my money for doing legal “legwork,” they don’t have to. Others already do as part of finding ways to make deals work, not looking for ways to kill deals before they start.
@Robert Leonard Haha now I'm killing deals before they start.
First rule in sales is make sure you're dealing with the decision-maker. You skipped that class.
If someone brings me a deal with a clearly unenforceable sales contract, I'll chalk it up to inexperience and yes I will do my best to get the deal to the table. Bring me another crap deal like that and guess what, the phone doesn't get answered.
The rule here is do your own work. If you don't confirm that you are dealing with the record owner when you put a property under contract, you might want to make changes to your process.
This is not a situation where the first step is a contract. Read OP's post. One or more grandparents owned this property. That means there could be 20+ owners here from two different families... which would only be determined through the probate/succession process.
LOL, this is so ticklish! I apologize, John Lewis, that this discussion seems to have taken a wrong turn down the road to “how we do it here in DC.”
I’m only offering an experienced perspective for here in Louisiana, which, I think, pertains to your original question. I hope my reply helped you or anyone following the topic doing business in LA.
I love it when people defend their position with "because" rather than law.
We cover 7 jurisdictions and in all 7 this is bad advice. This has nothing to do with DC and everything to do with getting a deal done properly when a property is in the name of a decedent.
Let's ask Homevestors if they endorse contracting with a non-owner as a strategy... in any jurisdiction.
Thanks for all the replies...It's been very entertaining and informative at the same time. I've reached out to an attorney involved with the local real estate investors association and we're going to try to get the person I've been in contact with to come in and see what our options are. She's still not sure about selling the property so step 1 is to get her interested and then figure out probate/succession.
Hello and thanks for inviting HomeVestors to the post!
No, I generally don't start negotiations or get a contract until I have some idea that I'm working with the owner. In this case, getting a title search is certainly a valid suggestion if you want the deal that desperately.
The reason I find that investors work hard on deals that may ultimately provide no to very little outcome is that they don't have enough deals to work. That's one of the problems HomeVestors solves. :)
If this is a deal John Lewis wants to pursue he, or perhaps his childhood friend, needs a real estate attorney to assist in the search. As Robert Leonard said, a title search will be needed eventually, anyway. I don't know that a contract is necessary as plenty of attorneys will do a quick search (for a fee) without one.
John Lewis, please keep us posted here so we know how this turns out!
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