Sounds like you need to get a lawyer. And if it was me I would definitely file a memorandum. I don't think a title company would insure a property that has something recorded against the title like that. Check with yours to see if they would even do it. I doubt it.
How did that other investor all of a sudden that other investor know how to get in contact with your heir? I'm hoping in hindsight you see that you should have filed your memorandum as soon as you found out there was recorded by another investor. Only afterwards should you have contacted that other investor. You don't contact the other party until you have some definite Leverage that you can negotiate. Simply Having a signed contract is not enough.
Again you should consult an attorney.