Title Problem Involving Probate

[Gursel Demir]

Went under contract to sell a house where, when I bought it, the title company did not raise any issues, and I have title insurance. My buyer’s title company sees things differently. Here’s a brief run down for you title/probate lovers:

Originally, Ma and Pa were in title as h/w. The next deed is from the both of them to Ma alone. Ma died several years ago leaving a LW&T appointing, her daughter, my seller as the Executrix with powers to sell, and Letters Testamentary were issued to her.

Pa died, seven days later, leaving a LW&T appointing, his daughter, my seller as the Executrix with powers to sell, and Letters Testamentary were issued to her.

The next deed is from my seller as the Executrix of the LW&T of Pa to herself individually, for no consideration. The next deed is from my seller to me.

My buyer’s title company wants a new deed from the Executrix coming out of Ma’s estate AND they want a deed from all of the other five siblings as they consider the previous deed to herself to be “self-serving” as it was for no consideration.

I agree that title came out of the wrong estate and my seller will execute a new deed as the Executrix of Ma and she has provided proof that she shared the proceeds, from the sale to me, with all of her siblings.

The buyer’s title company still insists on a deed from all of the siblings. Two of the five siblings are willing to cooperate, one refuses to sign anything “to protect herself”, the other two will not respond to me or to my seller, their sister.

My title co is trying to convince the buyer’s title company’s underwriter to insure with a new deed and proof of payment to the siblings. I don’t see that happening.

Am I missing anything other doing a quiet title action? Anybody see any new arguments for my case or a way I can deal with this in a timely manner and not lose my buyer?

Gursel

[Wayne Brooks]

Just an uneducated opinion....a quiet title action could be sticky if any of the other siblings fight it. Seems like this is a "it's your problem, fix it" to your title insurance co., as long there wasn't any exception regarding this in their policy. I doubt anything will be resolved quickly though. My best suggestion would be switch the closing agent/attorney to one that uses your current title insurance co., as they seem to be willing to accept it. If this buyer won't agree, designate your closing/tile co. for the next buyer.

[Shaun Reilly]

I agree with Wayne.

Quiet Title could be an issue since it won't be all that "quiet" if the people that need to sign stuff are alive and well and already know there is an issue.

The obvious solution is to have the same title insurer that wrote your policy write the one for the buyer. They don't have a problem doing it as long as there is no exception in it as Wayne mentioned.

Try to get the buyer to get a new company. As long as a legit company will write a policy it shouldn't much matter who does it.

[Gursel Demir]

Thanks @Wayne Brooks

I agree, unfortunately the buyer's attorney does not. Like the banks, I usually offer to pay the title ins premium if they use my title co, but no go.

Here in New Jersey the buyer chooses their own title company. In North Jersey, it's customary to use an attorney for RE closings, who then uses their own title company.

Gursel

[Rick H.]

Gursel - I just ran across your name in my files a couple of weeks ago and wondered how you are doing!

Sometimes you have to throw out the baby with the bath water. Since you may not be able to pass marketable title to this buyer, due is part to buyer's insistence on using their team, I'd do what I can to extricate myself from these people ASAP. While it may be possible to offer indemnification to the buyer's title company, I wouldn't bet on that flying.

I, too, considered the quiet title route here but it's likely to be lengthy and cumbersome. QT is great when you're fixing title and not trying to pass title. IMHO it works best when there are no parties to complain or respond. As you know I'm biased toward dead people. They're the quietest.

You could always lead a new buyer down a path that includes their choosing your title company.

Title companies are insurance companies, of course, and prefer to charge you money to loan you an umbrella when the sun is shining and take it back when it rains.

[Shaun Reilly]

Originally posted by @Rick H.:

Title companies are insurance companies, of course, and prefer to charge you money to loan you an umbrella when the sun is shining and take it back when it rains.

I love that!

[Gursel Demir]

@Rick H.

Thank you for chiming in. It's been a long time.

I'm working on the indem now and if that doesn't work I'm afraid you're right.

Gursel

[Gursel Demir]

Update on “Title problem involving probate”

First let me say that as investors we, at least I, sometimes forget that what is simple, everyday, regular business for us, can be confusing and intimidating to the people we are dealing with.

After much gentle persistence, four of the six siblings agreed to meet. We met yesterday, armed with all the necessary paperwork and a notary, and walked out there with for executed and notarized deeds.

While there, one of the siblings, the “influencer”, spoke on the phone with the two siblings who do not live in New Jersey and they also agreed to sign.

If all goes according to plan, we should have their deeds this coming up week and that elusive payday soon thereafter, but we all know that it’s not a done deal until the check clears.

Gursel

[Rick H.]

Great report!

As I've observed time after time, when the grieving is over, someone will always look up and ask, "...Well, how much do you think we'll each get?"