Estate sale property: Can we get a contract while it's still in surrogate court?
We have found a house in Clinton Hill that we like very much. It is an estate sale property that is still in the process of going through Surrogate Court (as far as I understand it) to have the executor named. We have made an offer on the property, which the seller’s agent seemed to think was at least worth entertaining. He explained that once the house clears the court, they’ll either get back to prospective buyers with a counter-offer or accept an offer. We have been waiting for weeks, and the agents contact us saying they still haven’t heard from the court. They originally said the court had hoped to be done by end of January (though they expected a wait, as well.) We are in the middle of a grueling house-hunt in Brooklyn, and would like to at least know whether our offer can be accepted and a contract signed. We’d be ok with waiting if we at least knew yea or nay on that part and could move on if it were to be sold to another buyer (and I realize these things are shaky as it is.). The seller’s agents are a very small operation and the heirs/sellers don’t seem particularly legally savvy, either. My question is, would it be possible for the seller (or would-be executor, or whatever party will be responsible) to accept an offer and sign a contract with language that it is contingent on the process being completed? In other words, can a contract be entered into before the formal appointment of an executor by the surrogate court? If so, how do we approach the seller’s broker with this proposal? I asked our attorney but haven’t heard back yet. Will ask again. But any insight from the knowledeable folks in this community would be appreciated. We really want to buy this house and hate being in limbo like this. Thanks!!
cityrat
in Real Estate - Sales 12 years and 2 months ago
6
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6 replies
clawfoot | 11 years and 1 month ago
Hi – We do a lot of work for executors and administrators and unfortunately I am pretty sure that you can not rely on any sale process before the executor is named by the surrogate court – with one exception. Now this is classic bar lawyer speak so take advice, but essentially the executor is appointed by the decedent (i.e. the person who died) to administer his or her estate. The ONLY role of an executor is to administer the estate in accordance with the documented wishes (i.e. the will) and in most states in the US the executor can be sued for loss if he or she mis manages this process. The fact that the executor may be a lawyer to the decedent or may even be a beneficiary and gets involved in probate is a side issue – all they can do is follow the instructions laid out in the will. So the problem you have is until the executor is appointed no one can administer the estate and certainly can not enter into what is likely to be the single largest asset in the estate (i.e. the house). So what to do? **1 – Petitioning the court is of no use**, the surrogate court will not “step into the shoes” of the person who’s will is being discharged (that’s the job of the executor) **2 – Finding out what the delay in appointing an executor has been caused by is very useful.** If its because an executor has not been named by the decedent then you can be fairly sure that whoever is appointed will not be a beneficiary – i.e. the incentive for whoever is the executor will be to get the job done quickly. If you are a ready-to-go- buyer and they can discharge all wishes quickly then you are in a good position. We won’t get into how executors are compensated but you can find out quickly and you can work out what gets them motivated if they are not family members **3 – Look for a power of attorney**. If it turns out there is no will and/or named executor then often at some point the decedent may have granted a power of attorney. Depending on how this is worded there may (stress may) be room for a sale, but is a slim chance. Good luck with your search – let me know if you want to know the contact details of the lawyers we used before, no idea if they would be relevant still on help@clawfoot.com
cityrat | 12 years and 2 months ago
We just wish we had some answers so we could move on definitively as we’re looking at other places.
cityrat | 12 years and 2 months ago
Thanks for the responses! @housepoor that’s what I think the case is here. It should be happening faster but we don’t know any more about it or what complications there may be, and basically nobody can enter an agreement according to the seller’s lawyer. @cupolacoffee, From what we’ve seen, I don’t think this is a case of a bereaved family that is being pestered, and that’s all I’ll say about that without being rude. @brokelin we have an attorney, from what I can tell he’s been pretty good so far, we have a pretty good team ready in general (GREAT inspector, highest recs for Jay Kaplan, Kaplan Home Inspection) but I don’t think he got back to us on this question. thanks for the insight.
brokelin | 12 years and 2 months ago
You are going to need a real estate attorney when you get an offer accepted anyway – so contact one now, ask this question, use it as a way of feeling out the attorney (if you don’t already have one, in which case you should be asking them) to see if you want to use them for your closing. They should want to answer this for you as a way of showing you they can represent you well so you will hire them. It might be useful to know all the ins and outs (from an attorney familiar with them) about what can happen in this situation (buying from an estate) BEFORE you make an offer.
cupolacoffee | 12 years and 2 months ago
Just how “grueling” is your house hunt compared to the experience of losing a family member? You complain that the “heirs/sellers don’t seem particularly legally savvy,” as if your own questions are extremely savvy, let alone their first priority. Under “normal” conditions, Letters Testamentary will take 6-8 weeks, assuming the deceased left a will, and the will’s not being challenged.
housepoor | 12 years and 2 months ago
My understanding is that the Executor is the only person aurthorized to act on behalf of the Estate. Until that happens, I don’t think there is anyone to sign an agreement on behalf of the sellers, at least not one that would be binding on everyone. I thought that Executors can be appointed pretty quickly although there might be complications holding things up. It is getting all the heirs to agree than can take forever. What is really a business agreement can become an emotional one. If you think they might be jerking you around, maybe you can go the Surrogate’s Court and see if you can get a copy “Certificate of Appointment of Executor” to check if the appointment was already made. Recently I was able to get a copy for my father’s Estate from the Surrogate’s Court without a problem.