The executor wants to send my contract to an attorney for review. Help!

James Crow · 2012-12-12T12:32:47-08:00

Here's the deal: I have an inherited property with a brother and a sister as the heirs. However, their uncle is the executor. I have everyone verbally agreeing to sell me the house at 60% of ARV, with very minimal repairs. My problem is the uncle wants $500 earnest money. I told him I only put down the legal minimum in Texas, $10, and that I do this because I buy houses as-is, pay all the closing costs and taxes, and I don't ask the seller for a thing. I think he will go along with my low earnest money amount, but now wants me to send him a copy of my contract to show to the attorney who handled the estate. My question is: What, if anything, needs to be taken out or added to my contract to easily pass the attorney's approval? I understand that every attorney is different, but does anyone have any experience with this that can offer some good advice? I still need my out clauses and to be able to have ample time to market the property to another investor, so I can wholesale it. I also need to make certain that I can keep my low earnest money amount. Message me and I will email you a copy of my contract, so you can look it over. This will be my first deal, if I can get through this hoop. I'm supposed to send my contract out, but am hesitant to do it until I know an attorney will approve it. Any advice would be greatly appreciated. Thanks in advance! James Crow

Jon Holdman

Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes

13y

I think you're going about this all wrong. If its clear from the will, beneficiary deeds or whatever that you and your siblings inherit this property, then let that process occur. As part of executing the will, you and your two siblings become owners. Now your uncle is out of the picture.

Now, turn around market the property. When you get a buyer, sell the property. Now, you and your siblings split the proceeds. You inherit the property with a stepped up basis equal to the value of the property on the date of death.

I see no reason to overcomplicate things by you trying to buy it during the probate process.

Now, if you're going to buy at 60% of ARV and pay your brother and sister each 20% of ARV to gain full possession, then I hope there's more to this story. If you turn around and sell at, say, 70% of ARV, are you going to pocket the entire amount? Which would net you 30% of ARV. You taking that extra cut is the sort of thing that can tear families apart. Even if they agree to it now, if you end up with a big payday, it will linger in the future. You may be entitled to something extra for your efforts to sell the property. But I would surely split the net profits evenly between all siblings.

The executor wants to send my contract to an attorney for review. Help!

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