Real Estate Deal Analysis & Advice
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Is everyone ready to hear my crazy deal of a lifetime?
@Joshua D. really, you do need to confirm that he legally could transfer title to you. If this was not done through probate, you may have bought nothing legally. You may have possession, but not a clean title. How was the title transferred from his parents to him? THAT is the part of the title that is not clear. Having a will and death certificates is not enough, you need a letter of administration or whatever its called in your state from probate.
If you do not have a clear title transfer from the deceased parents to him you do not have title. His transfer to you is meaningless. And a court would not think highly of your paperwork because the price does not match the market. It would look scammy.
Have you bought property after a death before? If not, you need to learn and follow the process.
Otherwise you need to get the remainder of your $80k back before it goes in his veins!
Not trying to burst your bubble, but this could be a costly lesson if your paperwork is not in order. Trying to help you:)
The son, as the only child would be top of the chain to get CTA, but I would guess there is a struggle with the heirs. Thus the fast and sneaky selling. The son also was not the parent's first choice of an administrator for the will. Hope probate was completed. Copied this basic information from another site ... Note:
The Administration C.T.A. are special letters of administration you must petition for when the executor in the will refuses to act or cannot act due to death, incapacity or otherwise, or if the executor resigns or his letters testamentary are revoked by the Court. The C.T.A. portion means “Cum Testamento Annexo”. In plain English, “with the will annexed” or in even plainer terms, something added to the will. Consider the following example when Administration CTA is necessary:
Example 1: Adam’s will names his sister Janice as executor and his brother John as successor executor. At Adam’s death, Janice is no longer living and John is residing in a nursing home with dementia. What does this mean for the other beneficiaries in the will if there is no executor to file the will and administer the estate? A beneficiary in the will can now petition to court for administrator CTA letters.
Example 2: Adam’s will names his sister Janice as executor and his brother John as successor executor. At Adam’s death, Janice is no longer living and John is appointed as executor. Subsequently, it becomes apparent to the beneficiaries that John is not fit to be a fiduciary by his mismanagement and concealment of estate assets. Consequently, the beneficiaries are successful in their petition to remove John. The person or entity who succeeds John as a representative of the estate will have the title of an Administrator CTA.
Surrogate’s Court Procedure Act – SCPA § 1418
There are typically three situations when an Administrator C.T.A. can be appointed:
- First and foremost, the decedent has to have left behind a last will and testament.
- The decedent did not name someone to be the executor of his estate;
- The decedent named someone as the executor BUT that person passed away or cannot act due to incapacity, incarceration, felony conviction, unwillingness to act, etc;
- The executor was subsequently removed by the court or he resigned.
Priority
Additionally, according to Surrogate’s Court Procedures Act Section 1418(1), there is a hierarchy of which individual is allowed to receive the Letters of Administration CTA in the following order:
(a) to a sole beneficiary or if he be dead to his fiduciary;
-this is when there is only beneficiary in the will who stands to inherit the deceased’s entire estate. If that beneficiary has died, then the executor or administrator (no will) of that beneficiary’s estate can became the Administrator CTA of the deceased’s estate.
(b) to one or more of the residuary beneficiaries or, if any be dead, to his fiduciary;
– if there is more than one beneficiary named in the will, the residuary beneficiary can petition to become the Administrator CTA. The residuary beneficiary is typically named in the paragraph in the will that says something along the lines of “I give all the rest, residue and remainder of my estate of whatsoever kind and wheresoever to…”
(c) if there is no eligible person entitled to letters under subparagraphs (a) and (b) of this subdivision who will accept, the court may issue letters to one or more of the persons interested in the estate or, if any be dead, to his fiduciary.
– any other beneficiary named in the will or a creditor of the estate can petition for Administration CTA letters.
#3 All Forums Contributor
- Lender
- Lake Oswego OR Summerlin, NV
- 61,135
- Votes |
- 41,415
- Posts
#3 All Forums Contributor
- Lender
- Lake Oswego OR Summerlin, NV
Originally posted by @Joshua D.:
@Lynnette E. We are in the process of getting title insurance, just to be safe.
Smart move and worth the 700 to 1000 bucks.. I have bought well over 100 props without title insurance. although out your way i would not buy without in our west coast markets title tends to be easier to track as its digital in format. But thats the risk you take when your buying deals that have to close in 24 to 48 hours.. its cost of doing business if you make a bad buy.. this goes for most that buy courthouse step property.. no different..
I suspect your going to be fine.. let us all know how it turns out. !!!
We have had some great deals but that is just INSANE! And we are buying 15-20+ per month.
- Real Estate Agent
- Sacramento/Placer ~ San Francisco Bay Area counties
- 739
- Votes |
- 1,569
- Posts
Originally posted by @Joshua D.:
@Lynnette E. The Will was recorded as well, with a supporting document signed by the deceased’ sister in law and the heir (sons) uncle, who is also an attorney, the called the document an Oath by Non-Subscribing Parties, verifying that the handwriting was of the deceased and legitimate. I’m not sure if this is a requirement, or legally holds weight, but he is the only child of the deceased. The will stated that “everything I own is to go to my son. No one is to get anything of mine except for him.” Type of language.
Oath by Non-Subscribing Parties sounds like a Holographic Will here in CA.
- Real Estate Agent
- Sacramento/Placer ~ San Francisco Bay Area counties
- 739
- Votes |
- 1,569
- Posts
Originally posted by @Matt Kitchen:
@Lynnette E. What does open probate mean?
It's still going through the Administration process.
When person dies their assets and debts go through a state or county regulated process prior to distribution. Each State/County has a little different process. This process is called probate.
So when someone says my XXx left me YYY in their will, it does not mean that the person will actually get that item. That is because the person's debts must be paid off first.
The method that is set up to make sure that the debts are paid and that the assets are distributed is called probate. So one files with the correct government office to 'open' probate. In some places its the orphan's court, a probate court or chancellery court. It changes by location. Some places have lots of court oversight, some are more administrative oversight. Once open, probate remains open until the final distribution of assets.
So, the court will appoint someone to over see the probate process. It will generally require legal notices in the paper to ask for debts to be sent in. It will notice potential heirs of the probate case. It will oversee that the estate debts are paid off as far as the assets will pay. This may result in, say, medical debt payments taking the value of the house rather than an heir getting the house. There is a priority system for what debts get paid first. The administrator in the probate case will have the ability to sell assets, but the payment generally goes to the estate of the deceased person, not into the hands of the administrator. Many courts have attorneys that oversee the process, some do not.
Generally if the debts can be paid and there are 'things' in a will that were to be passed on to specific people who want the actual asset then the asset --like a house--may be passed on to the person with a title change. But if the person does not want the assets, the probate process can sell the asset and pass on the money.
Once everything the person had is liquidated, the bills paid, and the assets that someone wanted and the money from selling the other things has been passed on to the beneficiaries then probate is closed. If there is not enough money to pay the debts the probate process is how bills are legally denied payment. The estate of the person may get an IRS bill for debt forgiveness. And the probate process pays the final tax bill for the person and the person's estate prior to closing.
A probate case is considered open until the final distribution is made.
The main problem with buying a house for someone who inherited it and they did not do probate, or they started it--opened it--but did not like the oversight or process, then they just stop following the probate rules (sell stuff, pay bills, then distribute assets/money) and sell the assets as a real person and the money does not make it to the estate, then the sell may be considered fraudulent and reversed by the court overseeing the probate case. So the money you paid is gone and you have a very expensive lesson.
When someone buys something at such a great discount, then its easy for the court to say, wow, something so wrong and this is not an innocent buyer, then they do not feel bad about reversing the fraudulent sell.
Someone not opening probate when someone dies is why there are homes that someone 'inherited' from a few generations back, but its still owned on record by grandma who died 50 years ago. Then it is hard to fix the title, grandmas' heirs are...XXX....then the next generation of heirs are...YYY...and now there are 20 people who need to agree to sell the house. The title is a mess to fix at that point.
@Matt Kitchen welcome!
Originally posted by @Joshua D.:
So seriously landed a deal that blows everyone of my other deals out. Me and my wife have been ecstatic and my father in law who is a big business man in the area cant believe it. Thanking god every day for my blessings already and needed a little help financially and really has helped me out. So here it is point blank bought a beautiful 3 bed/2.5 bath house in a remarkable development built in 2006. Ready for the numbers? Maybe its me that thinks it’s unbelievable but i even have to tell my realtor i purchased it for 150k and he said absolutely grand slam. Anyways heres the the real numbers. Purchase price =80k out the door needs nothing Market value=250k Sold for 240k back in 2006 I gave the seller exactly what he wanted with his asking price. I almost feel i didnt do the right thing still? Any other deals out there like that?
Found a similar deal in my area. The build date should be of concern. CHINESE DRYWALL! Can take up $90k to remediate for the average 3 bedroom home.
Make sure there is no Chinese Drywall as it's not good for your health... Not good for exiting.
#3 All Forums Contributor
- Lender
- Lake Oswego OR Summerlin, NV
- 61,135
- Votes |
- 41,415
- Posts
#3 All Forums Contributor
- Lender
- Lake Oswego OR Summerlin, NV
Originally posted by @Lynnette E.:
When person dies their assets and debts go through a state or county regulated process prior to distribution. Each State/County has a little different process. This process is called probate.
So when someone says my XXx left me YYY in their will, it does not mean that the person will actually get that item. That is because the person's debts must be paid off first.
The method that is set up to make sure that the debts are paid and that the assets are distributed is called probate. So one files with the correct government office to 'open' probate. In some places its the orphan's court, a probate court or chancellery court. It changes by location. Some places have lots of court oversight, some are more administrative oversight. Once open, probate remains open until the final distribution of assets.
So, the court will appoint someone to over see the probate process. It will generally require legal notices in the paper to ask for debts to be sent in. It will notice potential heirs of the probate case. It will oversee that the estate debts are paid off as far as the assets will pay. This may result in, say, medical debt payments taking the value of the house rather than an heir getting the house. There is a priority system for what debts get paid first. The administrator in the probate case will have the ability to sell assets, but the payment generally goes to the estate of the deceased person, not into the hands of the administrator. Many courts have attorneys that oversee the process, some do not.
Generally if the debts can be paid and there are 'things' in a will that were to be passed on to specific people who want the actual asset then the asset --like a house--may be passed on to the person with a title change. But if the person does not want the assets, the probate process can sell the asset and pass on the money.
Once everything the person had is liquidated, the bills paid, and the assets that someone wanted and the money from selling the other things has been passed on to the beneficiaries then probate is closed. If there is not enough money to pay the debts the probate process is how bills are legally denied payment. The estate of the person may get an IRS bill for debt forgiveness. And the probate process pays the final tax bill for the person and the person's estate prior to closing.
A probate case is considered open until the final distribution is made.
The main problem with buying a house for someone who inherited it and they did not do probate, or they started it--opened it--but did not like the oversight or process, then they just stop following the probate rules (sell stuff, pay bills, then distribute assets/money) and sell the assets as a real person and the money does not make it to the estate, then the sell may be considered fraudulent and reversed by the court overseeing the probate case. So the money you paid is gone and you have a very expensive lesson.
When someone buys something at such a great discount, then its easy for the court to say, wow, something so wrong and this is not an innocent buyer, then they do not feel bad about reversing the fraudulent sell.
Someone not opening probate when someone dies is why there are homes that someone 'inherited' from a few generations back, but its still owned on record by grandma who died 50 years ago. Then it is hard to fix the title, grandmas' heirs are...XXX....then the next generation of heirs are...YYY...and now there are 20 people who need to agree to sell the house. The title is a mess to fix at that point.
this is very evident in areas of Charleston SC you see these homes sitting there rotting away.. next to million dollar new construction and the why is.. exactly as you state .. no proper probate.. next generation just does nothing and the assets just rot..
@Joshua D. It happens. Sound like you are doing everything correctly. I've done lots of them. Follow up with the title insurance. Congrats !
Yes. Insure yourself to the max!!!!
Get title insurance now.
Get liability insurance to protect you in case there was a meth lab.