Does anyone have any experience doing Short Sales on estate properties. I have a situation where the heirs are receptive and I’m wondering how the Banks handle these and if there are special things for me to know. I’ve done several jShort Sales, but never for this type of situation
Hi,
I am not sure what state your in, so I have no idea what your state laws say but in most cases when a property is upside down and requires a short sale and the original owner passed away, there is no legal signer for the property and it gets foreclosed on.
It could depending on jurisdiction create legal problems for an heir to sign excepting a property as an inheiritance and sign it over as a short sale.
This could create a state and federal tax as a windfall and taxable as the difference between loan amount and short sale!
I have never had an heir willing to except posession of a home upside down that is being foreclosed on and I am not sure the lender would except signature for a short sale closing without the heir taking legal possession of the property.
Consult with an estate attorney on real estate and tax laws in your state.
GR
Each state is different, and I am not sure of all the facts, but this might help. I am assuming that by estate, you mean that it is in probate. If this is true, the same rules should apply, the estate would be treated as the owner, not the heirs. I know where I am at, there is no ability to do a short sale unless the mortgage is behind. I am not sure if the guidelines of the executor will be able to allow the payments to become delinquent if there is money available to make the payment.
You may need to wait until everything is sorted out between the heirs and deal directly with the one that takes control of the property.
Good luck.
You need to let us know the state.
I do quite a bit of estate planning in California.
Before you agree to anything on the house be sure to get a title report to be sure the person selling is legally obligated to sell. In some cases an estate sale brings a lot of problems when it comes to closing. In some cases there is another party involved/ brother/ sister/ etc etc. Now you can’t close because the party claiming to be the owner is not legally obligated to sell. Do the research, public notices in newspapers, etc etc.
Contact me if you have any questions.