Undeveloped land is one example where buyers can often get in for less than full value. The reason is that there are reltatively few people looking for raw land. To get full price may take many months, and sellers sometimes just want to unload the dirt.
But I suspect the probate had little do to with your bargain. Getting full proce was going to take a while, and the seller did not want to wait. In or out of probate, the guy wanted a quick sale of his dirt.
Posted by Dennis on February 21, 2005 at 13:03:43:
In my direct mail campaigns, a fair share of folks respond that they`d love to sell me their property, but Mom or Dad hold title and they passed away without a will. In other words, we need a probate action to pass title to the heirs. I would like to do dozens of these a year, but I think–given the local nature of probate statutes–I need a law firm with a national presence and an approach that could treat these cases with the efficiency of an assembly line. Any leads on law firms that would fit the bill?
There is a national bulletin board with estate and trust attorneys from all 50 states. If you find yourself in need of counsel from West Virginia to wherever, go to the site and do a search.
Posted by Valerie on February 25, 2005 at 01:11:33:
Dennis,
I am currently seeking an attorney to stop a tax sale here in CA. I want to know is there any way that this can done, in order for me to come up with financing? I once had a deal where I was dealing with the executor of an estate and helped them, actually, b/c they were out of state and the atty of record did not even know that the property was going to auction. I informed the the executor and she was willing to work with me but then at the last minute after I did all the work, they went with a more seasoned investor. So, you are definitely correct when you say you can waste alot of time and money, but I was looking at a very profitable deal with the atty’s blessing.
probate procedures differ from county to county and state to state. An out of state firm cannot open a probate in another state, unless the attorney is licensed there.
I’ve been practicing estate and trust law for 20 years. Here are some thoughts:
Your question grossly oversimplifies reality. If you dig into each case, and find out exactly how title is held, you may find that you do not need to probate a lot of these estates. You will find joint ownership, ownership by trusts, and other little surprises.
many states have summary procedures, affidavit procedures and other non-probate mechanisms for transferring real estate. You have to find a local attorney to educate you. every state is different.
I wonder how many of these direct mail replies would have been worthwhile deals? Did you kick the tires? I wonder how many of them really needed a probate.
Don’t let the ownership arrangement get in your way. Do your due diligence. If the deal is worthwhile, then help the people correct the title.
They will have to do it someday, so why not now.
They will not be able to sell the property or refinance the property until they clear title.
For those cases where you realy do need a probate, be careful about some things. Some states will allow an executor to sell property without court supervision. Others will not. In states or situations where court supervision will be required, the court can kill your deal if it is too far below FMV. and the estate attorney will kill your deal if it is too far below FMV. The attorney’s job is to keep the executor out of hot water. and to maximize the retun to the heirs.
You really need to get a solid command of the facts of the case. Make sure you are dealing with the right person or persons. You can waste a ton of time and energy dealing with an incomplete set of people. or the wrong person. just because your contact person is living in (or managing) the property, does not mean he is the one entitled to do so. and you can waste a lot of time by dealing with one child of deceased parents, when there are three others, and they do not get along.
contrary to popular myth, probate sales rarely involve significant discounts to FMV. I have handled many probate sales of real estate in California, and we got top dollar for all properties. we spend a lot of time gathering in comparables and we have a vested interest in fetching the best price and terms. Our attorney fees are based on the value of the assets under administration, and our client has a duty to get the best price. Stories about crazy 50% discounts in probate are massively exaggerated.
Posted by Gary (CA) on February 26, 2005 at 23:45:51:
I recently bought a 1.5 acre property with well, spetic and power on the lot here in Northern California. Asking price was 30K, similar to the asking price for other similar lots (range was 26K to 60K for the other lots) in the area. I got the property for 21.5K. This deal involved an estate, and required approval of the court.
Sometimes the heirs just want the money as quickly as possible and don’t want the delays and hassles that may come with trying to get “top dollar”, especially if the heirs are some distance away from the property location.