Buying a note...without a note

[Chris Nowlin]

I was contacted by a seller because of one of my mailers. He has power of attorney for his mother and is needing to sell her house. To make a long story short (can expand if necessary), the property is legally owned by his nephew through a seller finance arrangement in 2012.

Once I let him know the property was not in his mother's name he became confused. He did not realize the deed had been recorded since the note was never signed and a payment has yet (with an exception of recent months) to be made. There is a lien on the property for $150,000 held by the mother.

He agreed to sell us the note for $90,000 under the pretense that there has only been about $2,500 paid towards the property. As I am collecting documents to bring to a lawyer, the man tells me that there is note held by an attorney, but it was never signed by either party. Without the signed note, is everybody, except the property owner, out of luck?

I have provided the information on to a few people who plan on getting back to me when they know more, but I just wanted to put it out to the BP community and see your thoughts on the matter.

*The owner wants to try and sell the property for $200k, but we are afraid if he is successful, and the note is not legally binding, that he may not pay back any of the money owed. 

**Update** My partner spoke to a lawyer who told him that in Texas, we would not hold up very well if we purchased the note then file foreclosure because the property is Homesteaded. Any other legal professionals have an opinion on the matter?

[Don Konipol]

@Chris Nowlin

I just don’t understand why your soliciting the opinions of people on BiggerPockets who have not studied, graduated from law schools and practiced real property laws in Texas for the last 20 years. If someone living in California and working full time as a mailman while looking to buy a rental house on weekends tells you that he believes your Texas attorney is wrong, are you going to believe him instead of your attorney? Consensus by committee can only be hazard to your financial health. The well meaning responses by posters will be meaningless at best and dangerous at worst.

If you want to pursue your situation you need to bite the bullet, stop trying to obtain free information, and engage the services of an experienced attorney who specializes in real estate law.