Wholesaler Purchase Agreement: Which Seller Can Legally Sign?

Question

There's question as to "whom" (seller) has the legal authority to sign option to purchase agreement for (2) properties I'm trying to put under contract. I've got an individual wanting to put these properties under contract. However, the estate belonged to his father, who has passed, and the rightful heirs to both properties now belong to the individual wanting to sale, his brother, and several nieces/nephews (which I just confirmed with the estate attorney). The seller states he has power of attorney over his brother, AND that he's been unable to reach the rest of the heirs as they "appear" to be uninterested in what happens with the properties. I'm just trying to cover my butt here and not get wrapped up in something that could get messy and/or hurt my reputation by doing something out of ignorance. So, would I need to see a copy of the POA papers to prove this person can in fact sign for his brother, AND do I just take his word for it that the rest of the heirs are unreachable?? Any suggestions/advice on this matter?? This is my very 1st property I'm wholesaling, so I'm not really sure what to do....Thanks, April

Darius Ogloza · Answer

This is an important fact that did not come across from your earlier posts. The correct answer will necessarily require a careful reading of the court's order settling the estate and the document that the seller is describing as a power of attorney. Assuming that the property was left to the large group you describe and that the seller is authorized to act on his brother's behalf, you still have the problem of the other heirs (nieces and nephews). No title company is going to insure the transaction unless all of the heirs sign off on it or otherwise disclaim their interest in the property in a writing satisfying local law. If neither you nor the seller are sufficiently interested to run this issue to ground with the other heirs, the best you can offer your buyer is a quitclaim interest in the property from seller and his brother. This has to be clearly disclosed or you can get into a lot of hot water fast.

Steve Morris · Answer

Well, since escrow has to do the recording you should ask a legitimate (not one of those skeezy dual-escrow places) title company to look at the title and figure what they need to record a deed. Be a lot better than waiting for someone on this blog.

You may find out why it's cheap.

Cindy Bacigalupo · Answer

@April L. Williams deal with the estate attorney and title/escrow. Whoever is The executor should be the one you are dealing with and signs the contract. Title and escrow will then ask for all the paperwork and cover your butt docs. You may need a bit longer escrow if you are wholesaling. They may not be able to do a 5-7 day close.

Tom Gimer · Answer

@April L. Williams You need to be dealing directly with the Personal Representative of the Estate... not one of the heirs. Let the PR deal with the "uninterested" heirs as well as the ones who are apparently eager to sell. Establishing values for the assets of the estate and agreeing to a purchase price is part of what a PR does. Good luck.

Chris K. · Answer

@April L. Williams

I understand that your attorney is pricey but this is probably a situation to work with him/her. I do understand the logic behind trying to do your own leg work. But it actually doesn't save that much time in the grand scheme of things since — as an attorney — I still need to do my own due diligence. And oftentimes, the clients do not know what to look for so they end up sending me stuff that is basically irrelevant to the issue they are looking to resolve.

At minimum, you need to look at the POA papers and see if it got properly executed. In terms of the other heirs, I would first look at the deed to the property in question to see what the title looks like. I have my doubts that the executor and the probate attorney transferred the title to multiple heirs instead of just selling it. Not sure how they do it in NC but it's a royal pain in PA.

But long story short, I would work with an attorney.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

Chris Purcell · Answer

@April L. Williams this is more complicated than just learning how to wholesale, you’re learning the probate process - which can be very tricky. Good luck with it!

Marc Cormier · Answer

POA died upon death. I would let the title company work it out since they would be issuing the policy.

Chris Purcell · Answer

@April L. Williams if this is a solid deal, pay the $200 for a title company to walk you through this

Tom Gimer · Answer

@April L. Williams If the Estate was closed without transferring the properties to the heirs (or a third party for value), then it can be re-opened to do so. If the properties were transferred to the heirs*, then that deed/those deeds would be in the land records. The identity of the PR is also public record.

*If the properties were transferred by the PR to only the two brothers, I would be concerned about whether or not the "uninterested" heirs disclaimed their interests in the probate case.

Darius Ogloza · Answer

It does not sound like your seller has the authority to convey clear title to you. If the property is in probate (as it sounds) there must be an appointment of a personal representative and this person must be authorized to sell the property. It sounds like there is no court order yet and so you and your end-buyer will run the risk of having everything unwound if a legitimate heir comes forward in the future who did not receive notice of the sale. until this occurs, you have a contract to buy the Brooklyn Bridge. It is for this very reason that estates get probated. Make sense?

Wholesaler Purchase Agreement: Which Seller Can Legally Sign?

Wholesaler Purchase Agreement: Which Seller Can Legally Sign?

Most Popular Reply

16 Replies