Estate/Probate with Foreclosure Proceedings

5 Replies

Hey All,

Looking for some guidance. I came across a lead and trying to determine if there is some meat on the bone and what angle to take here. First off- this property has not gone through probate and per the administrator who is the son of the deceased, it will be complete through the court in a couple of weeks. He is positioning the deal to take over the estate currently and over his position as the administrator for $55,000 to have the ability collect rent until it goes through probate then the home can be refinanced. That does not work based on the #s.

The balance past due to WF which is also in foreclosure is roughly $130,000, plus his $55,000 that is $185,000, which is roughly what the home is worth today with no immediate renovations or upgrades needed.

I want to separate this $55,000 for a minute and that piece. Can WF foreclose in the current state this estate is in and can I make an offer without it going through probate? Would the offer go to the court? Technically there is not a legal title owner since its pending in the court. My thought process was negotiating a short-sale and based on the accepted amount will determine how much I would be willing to pay him in addition to the balance to clear the lien.

Hoping for some guidance and other strategies or perhaps this one not to consider. It's a 2 family currently rented at $1,100 each unit and it would cash flow with some cushion on a mortgage in the $100-$130 range with taxes. I am not comfortable with the acquisition price he is proposing based on what is due to WF today and his $55,000. Hope I gave enough details. I would like to be in around $120,000 if ARV is $185,000 on deal like this, but he is hung up on this $55,000 for work he put in. He is motivated and not looking to landlord,but also not in rush and happy to keep collecting rent until the other shoe drops.

There is no short sale possibility if the current FMV is $185k, and the loan balance is $130k. The banks may me slow, but they're not brain dead. I don't think the court will take "offers". Probate transfers the property to the heirs, then they decide what to do with it.

Actually, if the estate has debt AND the property has equity, the property may not end up transferring to the heirs, but rather be sold out of the estate by the admin. in order distribute as much as possible to the creditors. It appears that the admin is one such creditor? Is the admin. actually owed $55K? Or is he hoping to sell in order to recoup his repair/rehab costs?

WF is a secured creditor and if the loan is in default they can foreclose. The bank is not the owner and does not control the property until they foreclose and get it back at sale.

You, as an interested buyer can only make an offer to the current owner. There is a "legal title owner" today and it is the estate. The admin. gets to make the decisions for estate. If he transfers the property to himself and/or other beneficiaries, then they get to make the decisions.

If the admin is selling it out of the estate to pay debts, it's his job to get fair market value. If he sells it after it transfers to him or heirs, they can sell for whatever they want.

Sounds like you don't have a motivated seller, even with a pending foreclosure.

@Wayne Brooks my bad, short sale was not the proper term for this transaction because it's not upside down, but I didn't know if there was a possibility for them to accept less in this situation. It does not appear that way.

@K.Marie Poe thank you very informative, dead deal here.

Originally posted by @George Bittar :
@Wayne Brooks my bad, short sale was not the proper term for this transaction because it's not upside down, but I didn't know if there was a possibility for them to accept less in this situation. It does not appear that way.
@K.Marie Poe thank you very rmative, dead deal here.

I would'nt say it's dead. It's a lead. It's never over till it's over, and sometimes not even then.

The admin has a pending foreclosure and he has an attorney to pay. Of course he wants FMV, all sellers do. Stay in touch and see what happens. When the hammer drops, you want to be the one he calls.

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