I've got a lead for a house that just went into probate a few days ago. Speaking with the executor of the estate he has no interest in keeping the property and the house is now in probate due to the finances of the estate not being handled properly.
This is my first time with probate. It sounds like the house is upside down on the mortgage value.
What advice can I give him on dealing with the bank? Is there hope of saving a deal like this? What questions should I ask? Should I speak with his probate attorney? Should I discourage him from contacting a probate attorney?
NOT AN ATTORNEY, NOT LEGAL ADVICE.
But, at a glance, this could potentially be a year-long saga if the house is indeed upside down.
If the heirs all agree to sell, a motion for permission to sell the house would be wrapped up somewhere inside the probate case (which could take months depending on the chain of title, number of heirs, wills, etc.). But once the Order Granting Permission to Sell is issued by the court, the house could be sold by the estate/executor.
However, the house being upside down adds another layer of red tape to the mix. I believe the estate would also have to seek short sale approval from the lender - which could also take months.
The lender is likely to insist it get listed on the MLS for full exposure to the market, and then the sale might still be subject to bank approval - which can also take months to get, even after the house is under contract.
I recently had a similar transaction. In my case I bought a short sale that was wrapped up inside a bankruptcy case (rather than a probate case). Went under contract in August 2015 planning on a 90-day close. Ended up closing in March 2016, and still had title issues when I re-sold it in August 2016.
A probate attorney is probably a great suggestion. I see no reason to discourage the sellers from having an experienced attorney help move this along.
But, if there's indeed no equity, it might not be worth pursuing.
Hi @Jeff Copeland good suggestions. Thanks. It does appear this probably doesn't have enough equity to pursue.
This lead literally fell into my lap this morning. Didn't know how to handle it. Thanks for the clarification.
Probate short sale! Yuck!
There is little benefit to the PR or attorney for negotiating settlement with the secured creditor(s) (mortgage lenders) unless the local state statutes permit recourse loans to cut into the equity of other estate assets.
There were a couple of characters promoting this play a few years ago and pissed off the judges to the point that we can't utilize the laws now when we really need them. Thank you probate weasel.
While you might get through this file eventually, it will unlikely to be worth the hassle unless you have masochistic tendencies.
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