What is the process of going through probate like?

Question

I have an estate home under contract at a price that doesn't cover all of the claims. There are 2 FIFA Liens on the property, several unsecured claims, and the home is in foreclosure. I assume we need to go through probate with the estate to satisfy the deceased woman's debts in order to purchase the property.

Is that correct? How would that work?

Any tips to help us successfully purchase the property through the probate process and avoid an auction would help a lot.

Thanks

Is that correct?  How would that work?

Any tips to help us successfully purchase the property through the probate process and avoid an auction would help a lot.

Thanks

Mike Cumbie · Answer

"What is the process of going through probate like?"

Fairly similar to putting a very dry toothpick into your own cornea while watching a riveting game of wack-a-mole

Rick H. · Answer

You want to make a profit but seek free advice here and don't want to pay an attorney?

Do I understand you right?

Brian Erlich · Answer

@Jonathan Frazier, that sounds like solid advice.  Thank you.

Also, the FIFA liens are for discover & Capital one.  The deceased didn't pay her credit card bills.

Jonathan Frazier · Answer

I have gone through probate twice and I don't think probate works like that.  That sounds more like bankruptcy court.  If the FIFA liens are tax liens, then they actually have higher priority than the other liens.

Here is what I would do.  Approach a local real estate attorney (I would actually go by the office and wait until they are free) just ask for a moment of their time, and tell them you are getting started investing and are looking to build a relationship with a local attorney for your closings and advice.  Present the situation in a very succinct format so that you are not wasting their time.  They will usually give you quick advice for free as long as they don't have to research the situation and can just go by what you say.  Thank them and send them a $25 gift card with a thank you note the next day.  $25 and a little time is not much to spend.  If you don't trust the advice, just go to another attorney and repeat.  If you are hearing the same things, then their advice is probably good.

Brian Erlich · Answer

@Jonathan Frazier, the estate has $4,000 cash and the home.  I am not sure how the liens get reduced.  My theory (Based on very little knowledge) is that since the liens are paid based on priority we should either be able to negotiate with the junior lien holders or the court will allow the property to be sold to satisfy as much of the debt, in priority, as possible.  FIFA liens are judgements that have attached to the property due to non-payment.  I am not sure what their rights are.  I am also a bit fuzzy on what you do if the estate cannot afford all of its debts.  I would think the court would want to make the creditors as whole as possible and selling the property is the only way to do this.

Have you gone through a process like this before?

Jonathan Frazier · Answer

I would love to know if and how you are able to get the liens reduced to make it work.  I think I would probably walk away assuming that there wasn't enough equity to make it worthwhile.  Do they have other estate assets that could be used to pay down the liens?  All of the equity doesn't have to be in the house.

Brian Erlich · Answer

@Jonathan Frazier, I would love to be able to pay all of the liens, but the estate simply doesn't have enough value to cover them.  We are offering a fair price for a home in this kind of condition.  I think we will be heading to probate court with the purchase agreement and an appraisal in hand to try and resolve this.  The estate will be paying the bill for legal fees and those fees are slated to get paid before the FIFA liens.  I hope we can resolve this earlier.  If not, odds are that the last three debts in order of priority will get nothing instead of the small amount we can offer.  At that point, I guess my last resort is to go to the foreclosure or probate auction (whichever comes first).  I may even be able to purchase the home for less.

Jonathan Frazier · Answer

I would simply say your price needs to include curing ALL the title defects.  It sounds like your offer needs to come down to be able to pay for the remaining liens.

Brian Erlich · Answer

@Mike Cumbie, That is discouraging, but its what I signed up for when I started this adventure.

Brian Erlich · Answer

Yes @Rick H.,

I am looking to keep my cost of education as low as possible.  I also want to use professionals when it makes sense, but limit their use to only when it makes sense.

I assume that I will eventually need an attorney to help me through the specifics of Georgia law etc...  I just hope to put that off until absolutely needed.

What is the process of going through probate like?

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