Found heirs to abandoned property, now what?

Question

Greetings everyone!  This is a continuation of the post I started here:  https://www.biggerpockets.com/forums/93/topics/111285-help-how-to-buy-from-deceased-owner-and-cant-find-heirs?page=1

I was able to hire an investigator and find a few heirs that may claim this abandoned property I have found.  Since this topic is evolving into a specific plan of action now, I  thought it best to repost a new thread here.
	
	Specifically, the heirs are three children of the brother of the deceased (all in their 40's)--two of which I believe are located here in town.  So the question is this:  now that I've found some heirs, how should they be approached?  Does anyone have a general pitch for this type of situation?  I am also assuming knocking on the door will be much better than calling/mailing at this juncture...

My ultimate goal is to buy the property for cash - after which time I can decide if I want to fix it up or simply wholesale it to another investor.  I also wouldn't mind acquiring some of the valuable personal property items I saw inside the property (I'm not going to say what just yet!).  Again the house is the goal, with the other items as "nice to have" but not priority.
	
	I'm assuming my pitch should include an offer to pay for the probate process and ~$5000 tax liens IF they agree to sell the property to me.  If so, is this something that should be in writing?  Do I need to have an offer ready before I even start this conversation?  (Guessing it will be a full rehab job).
	
	I'm new to the probate process so I really am doing my best to understand what my options are here and any advice (especially from those savvy to Colorado law) would be helpful!
	
	Thanks!

Sharon Vornholt · Answer

Michael M.

Approach this property just like you would any other deal.  Contact the heirs if you don't know who the executor is. The best case scenario is that you can go directly to the executor or PR. Look at the property, determine if you want to buy the property, and write an offer. If it is a total gut allow for things you can't see; add a "fudge fund" in your figures for these surprises.

I would figure the cost of the liens in my offer so they would be paid off at closing. I personally would not offer to take care of probate costs. Some attorney's want a percentage of the estate as their fee. That should come out of the seller's funds at closing (which the attorney will do in order to get paid).

I always have the title run right away when I get an accepted offer on probates. Anything that needs to be done will come up early on. You don't have to be worried about the law. Let the attorney worry about that. You are not an attorney.

Just write in your offer that you will be responsible for cleaning out the house. If there are valuables I would say that your offer includes all personal property.

Sharon

Michael M. · Answer

Thanks Jesse & Rick.  Really good stuff!  I think I'm gonna keep it pretty low key and build rapport.  I like the simple white-sheet approach and that is generally how I approach homeowners for "normal" deals anyway.  
	 
	 Good call on being sensitive to the family back story as well.  Seems this family does have some serious issues of passing away early in life for the last 3-4 generations from I can see.
	 
	 Lots to learn on this deal but it is invested for the next one for sure!

Rick H. · Answer

Welcome to my world of pre-probate deals with a large amount of uncertainty.

Attempting to buy a property prior to anyone having the capacity, powers and authority to do so is pretty tricky. While you can enter into an agreement to purchase the property with an heir, until they (or someone) has sufficient powers to pass marketable title, you're basically stuck.  There are ways that you can secure their performance, but that has its limits, too.

There are all kinds of different models and ways to structure a purchase and, despite the insistence of the all-cash buyer crowd, you can gain some level of control if you choose to "partner" with the heir(s) along the way.

Another challenge is that you don't know the back story or family dynamics; just another way of saying you don't know if you're stepping on or what you're stepping into. I would discourage you from offering to be the PR, even if it's difficult to find someone who will act like an adult among the heirs. If a valid will surfaces, the decision might be made easier. Wills that surface after you've began can be a problem, too.

You best strategy, IMHO, is to do your best to figure who is likely to be the 'alpha' child, often the oldest with the most influence of the others, and get them on board with your plan. Your P.I. Should have provided you birth dates for the persons s/he found in their research.

I prefer to make my pre-probate offers on a single sheet of white paper with perhaps 7 or 8 line items max. and lots of white space.  This appears simple for an heir to decide and that's important because a confused mind says "no." This is not the time to attempt to use your State's Realtor-approved forms since they not only don't fit but will only muddle the situation.

When presenting your offer, remember that they are looking for your leadership and decisiveness.  If you come across as unsure of the process, they will most certainly pick up on this.  Once you've done this, you'll want to repeat this with another similar transaction.

Michael M. · Answer

Thanks.  I'm not trying to go around the family at all.  Simply want to have a good sales strategy before I approach them.  Best I can tell there is no will or executor.  
	
	Sounds like I need to show up on the doorstep with an offer and the phone number for a couple local probate attorneys to point them in the right direction...

Jesse Sumner · Answer

No legal advice but a few thoughts.  There are several ways you can proceed. However, I would recommend that you speak with someone that is well versed in succession laws of your state, like an attorney. Just like any deal, the more risk you are assuming the cheaper the purchase price needs to be.

An heir can deed away his/her interest, whatever it may be, in the property before a probate occurs. In this situation, you would want to give them next to nothing because you are taking all the risk and expense of cleaning up the title. However, a word of caution, you must be very sure that you have all the heirs and that there is not a will that names an unknown beneficiary.

You can approach them and offer to buy the house if they complete a probate and clean the title. However, the executor of the probate is the only person that can contract to sell the property and the contract is generally subject to Court approval.  In this situation, the purchase price will be a little more and you run the risk of another buyer showing up.

Another thing to consider, if the property is abandoned, then most likely the property taxes have not been paid for some time. You may want to research and see if you can by the tax certificates on the property.

Be very careful with these types of deal.

Good luck

Sharon Vornholt · Answer

There is no way you can go around the family. Can you find out who the executor is? Here wills are online (if there was a will). If not, a family member will need to be appointed the PR so the estate can go forward.

I would look at the house, write an offer and let the legal folks figure it out. Contact your attorney to find out how to write the offer since you don't know who is the "decision maker".

Sharon

Michael M. · Answer

Thanks Sharon for your insight and tips.

To date, no one has opened probate and the owner passed in 2012.  You mentioned getting title work done right away after an accepted offer.  However, I'm not sure I can actually write a contract on the property BEFORE the probate has even initiated--am I wrong?  My concern is that if I notify the heirs of their potential inheritance, they may see $$ and try to sell it to someone else or highest bidder.  I guess that is their prerogative and my risk in this game.  Just trying to minimize that potential.  Some cart vs horse stuff to get my mind around here...