My seller just DIED!!! Now what??? Probate?

Question

Ok guys, here is the down low.. (or is it low down?). I signed a contract for a GREAT rehab deal for a house in the hottest part of town in our county. Got the deal from a door hanger! Tried to get in touch with these people for months, but they seemed to have fallen off the map. I got a call last Friday from the son of the homeowner (who is the power of attorney) saying that he wants to sell! I go out memorial day to look at the house and we come to an agreement in 5 minutes! Just a reminder to have contracts in the car at all times! with the door hangers! and cards! We sign contract and closing scheduled for next Friday or sooner if possible. Well.... the mother, who was in the nursing home, passed away on Tuesday, the day after we signed.

My understanding is that he has to open up probate and post legal notice in the paper and blah blah blah before I can buy this house now. My contract is with the deceased mother by power of attorney through her son, but she is gone now. He needs the money. I had given $100 option money, but now he needs over a thousand for the funeral home alone. There are also back taxes that he will be paying out of the closing. ( Even though tax dept. said that he needs to pay by the end of the month?)

Today the clerk of court said this process could take at least SIX (6) months to a year to settle out!

I guess he needs an attorney, but does anybody have any experience in dealing with this? I spent my afternoon filling out probate applications and driving her son around because he has no transportation. I am happy to help with everything I can to get this deal to close, but I am looking for advice on what to look out for or expect.

I want the house and don't want someone coming out to try to take it from me.

Thanks guys! Hopefully soon this will be posted in the success stories forum.

David Miller · Answer

See NC General Statute 28A-17-9. Contract remains enforceable. Seller's son needs to meet with an estate attorney. You need to meet with a real estate attorney familiar with the estate administration process. You can close while the estate is still open but you need to jump through some hoops first.

Account Closed · Answer

Please search for Rick Harmon on this site (couldn't link to him on my phone). Rick's experience with probate investing may be instructive.

Ibrahim Hughes · Answer

1 - I would record the contract ASAP. 2- I would be ready to submit my contract along with my own appraisal supporting my contract price. I would also include photos of the worst part of the house, a contractors estimate and mold remediation estimate. All to be submitted to the clerk.

Joseph Druther · Answer

Thanks David. You mean Rick H? I am going to start reading through his stuff here on the site. I really need this house. My kids are hungry! lol

Joseph Druther · Answer

Hey guys, just wanting to update everyone and seek some more counsel. He had his mother cremated and I haven't given him any more option money. The tax value on the property is about 107K. I have it under contract for considerably less than that. If a contractor were to go into the house it would be about 100K or more to fix. My background is construction, so I can get it done less than that if I use my own guys, etc, but a contractor probably wouldn't do the job for less than 100K. Now I have it under contract for a good deal even so, but the sellers attorney is telling us that the clerk of court may not allow the sale for my price without an appraisal and a special private sale. The thing is that I did get a contract for a great deal! If the appraiser comes back and says its worth 100 then what do I do? The house is in disrepair. Total gut job and redo. Mold crawling the walls, old fuse box and wiring, needs completely new HVAC system, mold throughout subfloor, trash EVERYWHERE, nasty old windows/plywood coverings, and the list goes on and on. Oh I forgot to mention the human feces because there is no running water or power. My attorney tells me I have two options. This is what he sent me"1 – Get litigation counsel, record a memorandum of contract, file a suit for specific performance, and file a lis pendens. This will prevent estate selling property to anyone else. You may still need to negotiate a higher to provide enough funds to payoff all liens and bills of the estate.2- Forget about your contract, monitor the estate, and make an offer when the house is offered for private sale in a special proceeding. If there are not other bidders you may be able to get the same price with less legal bills and hassles. The clerk will have to approve the sale so there will need to be an appraisal showing the price is close to fair value."What do you guys think I should do? Anybody been here before?

Joseph Druther · Answer

Thanks everyone! I thought that it was still enforceable. I am going to contact my attorney again this morning. I really can't wait to get started on this house! I don't want to get my hopes up and have something fall through, but I really need this house to close lol! What about adding an addendum to the contract for more option money? He can't bury his mother because they don't have the money. They need about $1000 more to do that since the mother was on a prepayment plan. I would need to do that today for them. I really want to make sure they feel like we already have the house sold. I guess I just fear someone trying to come in and weasel me out of my deal. Maybe Im just thinking to hard. lol

Rasheed Hope · Answer

a contract is usually binding between the seller the buyer and their heirs. If there was a legal contract in place before the sellers death there shouldn't be a need for probate from my understanding of Florida law... It may be different else where.

William Morgan · Answer

If it were me I wouldn't abandon the contract. See a probate attorney first on a free consultation. Explain the situation and your objectives and then bring the Seller in. Expect to have to extend the contract. The probate attorney will of course charge the Seller a fee deducted from the estate so think about how you'll handle that with the Seller. In CA it's often a percentage of the estate (3%?). I don't know NC but you should be able to wrap it up in 3 months.