When Buying and Selling a Probate Property

Question

Hello, all. When buying a probate property, does one close using the probate attorney, or can the purchase be done via a title company like a traditional real estate transaction?

Jon C. · Answer

I wouldn't deal with the probate attorney for anything. Deal with the personal rep to negotiate the deal and your title company to close.

Account Closed · Answer

Hey, thanks for the replies. Hello, Ibrahim. This particular property is in Pennsylvania. There's a legal issue attached to the estate that has to be resolved now. It's due to go to tax sale next Tuesday (9/20/11), and since this is my relative's property, I have to find a way to put up the money to cover the back taxes, then enter a payment arrangement with the tax claim bureau. This legal issue (a lis pendens dilemma) must be sorted out before I can proceed. It's quite a challenging issue at this time. I'm thinking of holding onto to this one and rehabbing it next year.

Account Closed · Answer

Thanks, everyone! Well, this situation is a bit unique as it's an estate sale between my relative and me. The executrix, who is my relative, put everything in my care as she had to return to her home state. She's still the personal rep, but I have the say-so as to whom I would resell this property to. Everything's documented accordingly.  I picked the attorney that we would handle the transaction with, however he's traditional in the sense to say that he's not familiar with double closings. I've decided to deal with a title company instead as we have to beat the clock since we have a tax sale pending on the estate and have to pay a few debts off.

Account Closed · Answer

Thank you, Chris. I just needed to know if I have to use the probate attorney or if I can utilize a title company to do the closing. The attorney that I'm dealing with told me that it's best for me to get the deed recorded in my name, then we can do the second closing with my end buyer. I suppose I should use a title company so that I can do a double closing rather swiftly instead of waiting a few days. The seller has put total control in my hands regarding the probate property.

Ibrahim Hughes · Answer

Rob,

Are court approvals required on some tax foreclosures as well in OH?

Rob Gillespie · Answer

Nicole, 
I use the title company that I use on all of my deals. The only glitch is court approval sometimes, other than that, it is a normal deal. :mrgreen:

Ibrahim Hughes · Answer

Hi Nicole. You're in NJ, correct? If so I hope by "tax sale pending" that you mean there will soon be a tax lien on the property (sold by the city to a 3rd party) for non-payment of property taxes. No big deal in NJ except the added penalty (as much as 6%) and possible interest.

But if it's a pending 'tax foreclosure' make sure you communicate with the tax lien holder's attorney asap and let them know that you are purchasing the property and paying off the taxes. In NJ, once a complaint is filed for tax foreclosure, the seller either has to get court approval to sell to you or approval from the tax lien holder. New law as of about 4 years ago. Lookup Tristate Investments vs. Cherrystone Bay. I also discussed it in more detail about a year ago in another thread:

http://www.biggerpockets.com/forums/70/topics/47427-what-are-the-best-states-for-buying-tax-liens-?page=2

I also disagree with Dave on the need to use a probate attorney. Your title co. will lay down the rules and instructions for properly closing your probate deal. As long as he's a real estate attorney he should be able to handle everything just fine. Besides, a probabt attorney is likely to represent the seller and rep. of the estate, not you as the buyer.

Dave Reynolds · Answer

The recommendation is that you close with a probate attorney due to the complexities of estate laws. Failure to properly follow the estate laws can present title and ownership issues in the future. In order to avoid such problems you should use a probate attorney.

Dave the Real Estate Guy

William D. · Answer

You definitely would not close with the probate attorney as your representative. However, he or she may be involved in the transaction a number of ways. They could be the authorized agent of the estate for negotiation purposes. They could be the appointed fiduciary and thus would actually executed and sign the deed to provide to you. Depending on your state, they could be the probate judge and have to approve the transaction (although if this is the case then you should not be negotiating with them)

The point is is that I wouldn't necessarily discount the probate attorney as a non-factor. Depending on where he derives his source of authority he could be a major factor.

Chris Colvard · Answer

It's just a normal transaction.

When Buying and Selling a Probate Property

Most Popular Reply