Buying Property in Probate

[Toure Lee]

Originally posted by @Toure Lee:

There's a seller whose properties never went through probate. Mom and dad passed away without a clear will and there are several siblings. The seller wants to dispose of the properties--a headache--and the siblings want to sell as well. What are the steps required for the seller I'm working with to get a clear title? About how much should this cost in attorney fees? Are federal/state taxes due as a result of the title transfer? Just trying to understand if I should even get involved in this. I was thinking to to work with the seller and get the properties under contract and then wholesale them. They're both rented and in good shape with some recent improvements.

[Rick H.]

Since all probate laws are by State and you do not indicate this opportunity location, I'll just assume (?) it's in Michigan.

Your "seller" has nothing to sell at the moment besides the expectancy of an inheritance, aka beneficial interest in a Decedent's estate.

You want the property and need a seller who can pass marketable title to you.

Your seller needs CPA's which is my term for Capacity, Powers and Authority to sell. 

Depending on state laws and property value, it may be possible to open a formal probate and sell to during the course of administration. Or, it may be better (and less expensive) to do an informal probate (if available) then distribute property to the heir(s) before selling to you. The latter has its own problems, however.

Find a local title company that can help you find an attorney, if needed, and steer you through the process. It may not be that expensive and just build it into your cost basis.