Buyer died on seller carryback, what do I do now?

Question

The relatives want to abandon the property to me, do I need to foreclose the Deed of Trust or will recording death certificate be enough? There will be no probate or will. This property is not worth very much ($30,000 and buyer still owes $22k so relatives don't want the trouble of cleaning it up to sell etc. (I live in Arizona if that matters.)

Dave Metsker · Answer

If you are the original seller and the beneficiary of the deed of trust, you just have to foreclose the note and deed of trust, for non payment.  The buyer's death has nothing to do with the process.  I would get a quitclaim deed from the niece and/or other interested family members, just to give record that they do not want to have any interest in the property.  The language of the trust deed gives you, the beneficiary, the right "to preserve and protect the property" (to clean it up and secure it).  You decide if you want to take other action during the foreclosure process, such as putting a "keeper" tenant in the property, to protect your investment from vandalism.

Wayne Brooks · Answer

There are only 2 ways to get clear title back...

1) foreclose

2) someone with Legal authority will have to sign it back over to the seller/mtg holder by DIL.  This will require either probate or possibly execution of affidavits of heirship, depending on the situation and state laws, so someone gets title to sign it back over.

Raquel Baranow · Answer

Foreclose. Best way to find a foreclosure attorney besides online is to check your County legal paper for who the attorney is in the forclosing Sale, legal ads. There are attorneys who specialize in this. Costs about $1600 to do it.

Tara Meinke · Answer

Thank you Wayne, she hasn't been able to find an attorney in Texas who will touch this. Regarding foreclosure, my friend was told you can't foreclose on a dead person. But wouldn't she just include the 2 sons who would most likely be receiving the house through probate (no will)?

Then regarding probate, the 2 sons are not initiating the probate and would she have to open up probate then? She heard that's expensive and what if the sons don't sign a DIL?

So what is the best path to take assuming things don't go as easy as hoped?

Tara Meinke · Answer

Hello how was this resolved? My friends have the same issue. Tara Meinke

Raquel Baranow · Answer

thanks Dave and everyone, I'm going out there tomorrow morning to take pictures and put up a for sale / for rent sign

Raquel Baranow · Answer

thanks, yes, it's a deed of trust, seller carryback (I'm the seller/beneficiary), buyer died (actually he was killed). it's in pima county AZ. there is not going to be any executor or probate. the niece of the deceased abandoned the property to me. the buyer owes $21k. the property is a mess (lots of junk and a mobile home), I'll probably be lucky to get $25k as is. Dirt alone is probably worth $25k. I'm going out to look at it tomorrow, it's about 30-miles away. :(

Bob E. · Answer

Where is the property located?

Is this a contract for sale or Deed of trust?  If the borrower had an estate then I would think the executor could do a DIL back to @Raquel Baranow.  Contract for deed is usually pretty easy to take back if the borrower defaults but I am not sure of what happens when the borrower is deceased.  I would certainly be willing to make an offer on the note but suggest  you see if you can resolve it yourself first.  If it is easy to process then no point in selling for a discount.

Rick H. · Answer

Raquel - may seem clear to you, but not to us. Are you the record owner of the carryback trust deed note? Again, to be clear, you once owned the property, sold it or someone else owned it, then sold it and carried a purchase money note?

Then the buyer/borrower died?

If that's the case, then in order for you to pass marketable title, you will have to perfect by either foreclosing or completing some form of probate process. Perhaps as the other poster mentioned there's a small estate affidavit that can be recorded along with a certified death certificate and assignments from the other heirs. I really don't know AZ law, so you'll need to ask a title company.

If you do, in fact, own the note then foreclosure is another way to perfect title or if you're lucky, perhaps someone will buy at trustee sale and create liquidity for you.

Alternatively, sell the note to someone who would want it.  Maybe  NP note buyer Bob Estler  (Queens Creek, AZ) on this site?

Dave Metsker · Answer

It sounds like you want to take over the original seller's position as holder of the trust deed.  If the decedent is the only beneficiary on the deed of trust, you will need to file a probate action in order to foreclose and get clear title.  You may be able to convince a title company to give you clear title on the basis of all the relatives who would inherit the trust deed as part of the decedent's estate, giving you a quitclaim deed.  Another option is a small estate probate.

Buyer died on seller carryback, what do I do now?

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