Seller Dies During Transaction

[Souix]

What is the name of your state? Oregon

What happens when a seller dies during a real estate transaction? I know that the transaction is binding on his or her heirs, but does it have to go through probate or can it continue on to closing just as if the seller were still alive, with the heirs signing the closing papers?

 

[mykoleary]

I'm confused. Your profile to the left says you're a real estate broker, and you're asking US??

Who'd you pay to get your license?

 

[Souix]

I'm confused. Your profile to the left says you're a real estate broker, and you're asking US??

Who'd you pay to get your license?

***If you read my profile down below it says that I am not qualified to give legal advice. I am asking for legal advice. Its an important question I don't have the answer to because I am not an attorney. Obviously you aren't either. Thanks anyway***

 

[I AM ALWAYS LIABLE]

What is the name of your state? Oregon

What happens when a seller dies during a real estate transaction? I know that the transaction is binding on his or her heirs, but does it have to go through probate or can it continue on to closing just as if the seller were still alive, with the heirs signing the closing papers?

======================================

My response:

Actually, this is a very common problem with a simple answer. Yes, the Estate must be probated, and the court must appoint someone to "speak" for the Estate - - an Adminstrator or Executor.

Let's look at it this way. Seller dies, but has 5 heirs to the Estate. Who is the person that would have the legal authority to act on behalf of the Estate? What if there's in-fighting? This is the reason, the essence as it were, for the probate process.

Sure, probate can take months, but without it, and assuming the heirs cannot agree to how the Estate is to be handled and divided, then a sale like this could theoretically take years, or never happen at all.

So, even when the heirs can, or cannot, agree the court is there to make sure that the Estate is handled in a proper fashion and with the least amount of delay possible.

IAAL

 

[Souix]

Ok thats what I thought, thank you.

 

[mykoleary]

***If you read my profile down below it says that I am not qualified to give legal advice. I am asking for legal advice. Its an important question I don't have the answer to because I am not an attorney. Obviously you aren't either. Thanks anyway***

Ah, see, the tagline below is your SIGNATURE. Your PROFILE is to the left, as I stated. And, it says you are a real estate broker. I can't imagine how one would get a broker's license (agent license maybe...) w/o knowing circumstnaces such as those you are specifically asking about (lawyer or not)...

 

[Souix]

Ah, see, the tagline below is your SIGNATURE. Your PROFILE is to the left, as I stated. And, it says you are a real estate broker. I can't imagine how one would get a broker's license (agent license maybe...) w/o knowing circumstnaces such as those you are specifically asking about (lawyer or not)...

***It is plain to see that you don't know the difference between a Realtor and an Attorney. I took my realtor exam about 10 years ago, you get rusty when you don't deal with probate matters on a daily basis. Happily I do not.***

 

[I AM ALWAYS LIABLE]

My response:

Mike, while I said this was a "common" occurrence, I was speaking on a national level. Such a situation may have never occurred to Sioux before and, for all you or I know, Sioux may have been absent that day from class.

Besides, how many cops do you know that have ever fired their gun in the line of duty during their career? It may not occur in our fishbowl, but we both know that cops do fire their guns in the line of duty on a national level.

IAAL

 

[Souix]

My response:

Mike, while I said this was a "common" occurrence, I was speaking on a national level. Such a situation may have never occurred to Sioux before and, for all you or I know, Sioux may have been absent that day from class.

Besides, how many cops do you know that have ever fired their gun in the line of duty during their career? It may not occur in our fishbowl, but we both know that cops do fire their guns in the line of duty on a national level.

IAAL

***Actually, you are correct IAAL, I did miss that class, I challenged the test....I missed all those classes...lol.

Mike, anyone can take a test and pass it, especially a Realtor's licensing exam, they are just so easy. Since we do not deal with lots of different scenarios on a daily basis we get rusty. I am glad I have never had a seller die during a transaction. Its staying in the profession and making a living doing it thats the hard part.***

 

[nextwife]

Hey, back in '81 or so, I was involved in a transaction where the seller died after the offer was accepted.

It's been a while, but I think I remember that in that case, the will was filed (only 2 heirs, son and wife, the seller was an old rehabber and this was investment property), PR named. All the heirs and the PR authorized the sale, but proceeds were held in escrow until the probate was done, in case of any surprises.

WE were in a rising mortgage rate market and all were afraid the buyer would no longer qualify at the higher rate if he lost his 60 day rate lock (over 11% APR!)

 

[Souix]

Hey, back in '81 or so, I was involved in a transaction where the seller died after the offer was accepted.

It's been a while, but I think I remember that in that case, the will was filed (only 2 heirs, son and wife, the seller was an old rehabber and this was investment property), PR named. All the heirs and the PR authorized the sale, but proceeds were held in escrow until the probate was done, in case of any surprises.

WE were in a rising mortgage rate market and all were afraid the buyer would no longer qualify at the higher rate if he lost his 60 day rate lock (over 11% APR!)

***So was the transaction allowed to close within the 60 day lock period?

The second half of my question is, if the seller dies, can the buyer cancel the transaction and get his earnest money refunded to him? There is nothing in our earnest money agreement that addresses this, only that the sale is binding on the seller's heirs. The reason I ask is that I have a current transaction, where the seller has just had a heart attack and is hospitalized. I am the buyer's agent. All conditions have been met in the contract and we are now waiting on documents to arrive in escrow. Buyer's lock expires March 1st and the closing date has been extended to 3/20/04.***

 

[mykoleary]

***Actually, you are correct IAAL, I did miss that class, I challenged the test....I missed all those classes...lol.

Mike, anyone can take a test and pass it, especially a Realtor's licensing exam, they are just so easy. Since we do not deal with lots of different scenarios on a daily basis we get rusty. I am glad I have never had a seller die during a transaction. Its staying in the profession and making a living doing it thats the hard part.***

I could see it possibly missing from training as a real estate agent (versus a broker) since the agent could go back to the broker they practice under for help in extraordinary circumstances.

I was not meaning to say in any post that you are stupid or unqualified, I was just surprised that this scenario was never covered during training to be a broker. Not being an attorney, I could see needing help going through the actual paces, but it just seems like something that training would expose you to.

It looks like you're well covered now, and that's a good place to be.

Good luck!

 

[mykoleary]

My response:

Mike, while I said this was a "common" occurrence, I was speaking on a national level. Such a situation may have never occurred to Sioux before and, for all you or I know, Sioux may have been absent that day from class.

Besides, how many cops do you know that have ever fired their gun in the line of duty during their career? It may not occur in our fishbowl, but we both know that cops do fire their guns in the line of duty on a national level.

IAAL

True and true. Sioux's posts make him/her sound professional and my surprise was not at him/her, but more the lack of this scenario from broker training.

See my post above.

BTW - My name is not Mike, it is Myk.

 

[Souix]

I could see it possibly missing from training as a real estate agent (versus a broker) since the agent could go back to the broker they practice under for help in extraordinary circumstances.

I was not meaning to say in any post that you are stupid or unqualified, I was just surprised that this scenario was never covered during training to be a broker. Not being an attorney, I could see needing help going through the actual paces, but it just seems like something that training would expose you to.

It looks like you're well covered now, and that's a good place to be.

Good luck!

***Myk, there is no training for brokers or licensees. There is continuing education, but this subject hardly ever comes up. My principal broker is too busy to answer these questions, otherwise I would ask her. Others in my office didn't know the answer either. Its just that sellers hardly ever die during a transaction, so we tend to get a little rusty. I was basically just asking to confirm what I thought was probably the correct answer. Now if we can get past the broker training requirement, I would like an answer to the second half of my question please.***

 

[nextwife]

In our case (and my memory is foggy after all this time) the family wanted this junk income property closed in the worst way. Neither the widow nor sonny-boy wanted to deal with making sure the vacant property didn't get trashed while sitting vacant. They did not want to lose the buyer and start over. Everybody with a potential interest in the estate signed off on the sale, authorized the estate to sell. They all felt that delaying might have caused this asset to devalue.

I think the title company gave affirmative coverage and held the seller proceeds. Those were not distributed until the estate distribution and debts were determined.