what steps do I take to get a house under contract while still on probate
If you're interested in probates, you may want to connect with @Sharon Vornholt . She's been very successful in this niche as a wholesaler primarily using direct mail marketing. Her articles on the subject can also be found on the BP blog.
Hope that helps!
Another excellent source for details on buying probates is Ron Mead. His process covers all of the details.
The probate process causes the deed for a inherited house to be transferred from the name of the deceased into the name of the heir(s). If probate has not been completed, the deed cannot be transferred to a buyer. You can get the house "under contract" with the heir prior to the completion of probate - you just won't be able to CLOSE until the deed is in the name of the seller (the heir).
Probate can't be closed until all creditors have been paid. Very often estate assets must be sold to do that. If the estate is administered under the IAEA (Independent Administration of Estates Act), which the vast majority are, a Personal Representative will be appointed (almost always the person or substitute, the decedent recommended in the will.) This is very often the main heir. If the PR is given Full Authority, that person immediately has the authority over the assets including selling the house and other assets before the probate is closed to obtain cash to pay creditors. The PR can immediately sell when they receive authority. The heirs want cash. Also, often the PR does not want the hassle and expense (double mortgage payment, insurance on a vacant house, maintenance, etc.) of caring for a house while the probate continues. Another reason they sell quickly. The PR must give an accounting to the court of cash receipts & disbursements to creditors before distribution to the heirs.
All probate laws are local, that is, subject to statute in the state of the filing and decedent's primary residence. So, don't think that what is suggested in one state is necessarily applicable to another, even neighboring, state. IAEA is CA, not Federal.
In order to purchase property during administration of an open probate, you need to determine the capacity, powers and authority of your seller, presumably the person in charge, various referred to as executor, administrator, personal representative or such fiduciary role that empowers them to transfer marketable title.
In CA, you look at two documents: The Order for Probate and the corresponding Letters of Administration (or Letters Testamentary, if Will admitted). You ought to care because, absent sufficient powers, court confirmation may be required which subjects your offer to overbid. This means that in a strong sellers market there's a high shot that others might snag your deal, unless you know how to make offers that still favor yours.
I suggest that to keep things simple, you make a one-page offer with lots of white space and simple terms. Seller should be named same as their legal capacity title. Know enough about private and title in the applicable state and I strongly urge you to get title insurance.
tks all for responding make s thing a lot clearer now
Texas, Florida, and Nevada have Independent Administration of Estate Acts. Google them.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!