Looking at a deal (?) that presents some interesting twists and turns I've never encountered. So, before I go to counsel and hit them up on this one, I thought I'd run this one by some of who will hopefully shed some perspective and/or experience. I have no idea how this one's going to play out.
Here are the facts:
- owner recently deceased; has no will (died intestate)
- I have been told, but have not confirmed, decedent has zero surviving kin. So, I have NO IDENTIFIABLE SELLER. State law mandates however, if there's no kin in which to heir the property, it would escheat (transfer) to the State. However, since (without a short sale or trustee sale) the liens on property exceed the value, how is that going to work? Even so, assuming we reduced (via short sale) the balance of the loans to market value, it would still require a buyer for the minimum of the reduced loan balance in order to transfer title out of the estate. Why would the State even bother?
- as of now, the property remains in the decedent's name.
- property has been homesteaded which may affect other issues!
What I don't know is how the probate court will proceed with this and who will be appointed/authorized to sell the property,
Ideally, the probate court's administrator would allow my realtor and I to negotiate and submit for short sale to dispose of it to avoid foreclosure. How else is the court going to liquidate this asset (assuming there's no kin of the deceased) without appointing a realtor to short sell the property? Just let it go to foreclosure, I guess? What's the difference to the State, if they have nothing to gain either way - unless the loans become null/void if the decedent has no kin? If so, then this is a no-brainer for the State.
Perhaps, I should try and contact the lenders?
Intestate estates can take a long time to probate. Two years is not uncommon. Chances are the property will be foreclosed before probate closes.
Since the deceased can't transfer title, the probate court (or the court appointed executor) will have to sell you the property. Your first call should be to the probate court to see if the court has appointed a representitive.
It's partly state- specific. I doubt it would escheat. Very, very few individuals have no heirs. Short sale is the route to go. The administer of the asset will likely abandon the asset if the property is under water
Thanks, guys. That confirms what I thought. Got to get ahold of the probate court and see what we can do.
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