Buying a deceased estate not through probate

[sammmeee]

Looking at putting an offer for a property just on the market. Found out it is a deceased estate not yet through probate. The agent (another story there) has given two annexures for the contract

A:
The property is sold as is no warranties on the property to be given (paraphrased)

the purchaser is aware tha the vendor is selling the property as the executor of the estate of xxx and that the liabvility o fthe vendorin regard to this eagreement extends only and is strictly limited to the net assets of the estate in the hands of the executor from time to time.

B:
1.this offer is made subject to the xxxx making application and having issued by the supreme court of wa a grant of probate fo the will of xxx deceased within 63 days from acceptance of this offer, or other such date as agreed to in writing by both parties..
2. Settlement is to be within 28 days from teh date of granting of probate, or other such date as agreed to in writing by both parties.

sooo...
I know probate can take a loooong time. agent says 3 months..ppppleease. My mate has waited over 2 years for her mums estate to go through (in fighting).

Dont care about it taking a long time at all. The longer the better for us. BUT
I was thinking of doing this subject to finance granted 21 days from probate being granted...
Settlement to be 21 days after finance has been granted...

I rang to let the agent know we wanted to make an offer. He then adds oh and the vendors want a 10% deposit. I know its done over east but here its kinda token 500-2k deposit max as our contracts dont have cooling off periods and are pretty definitive.

Why would he ask for this? we could be held up for settlement for a long time with the deposit tied up..

also what happens to the empty house..if it gets trashed who's responisibility is this..

Thoughts?

 

[Terry_w]

10% deposit to make sure you are serious.

Vendor liable, usually, to make condition at settlement the same as the condition at exchange of contracts.

 

[sammmeee]

but thats the whole point. In WA as soon as you sign the o&A contract and it is accepted. There is no getting out of it unless the subject to finance clause fails and even then the vendor doesnt get the deposit.

 

[paulie]

Hi Sammeeee,

is the property a renovation, a sub division or a buy and hold investment strategy for you?

As depending on your plans, i would suggest you negotiate for different outcomes if the Agent and or seller wants a big deposit (and 10% is huge in WA - not unheard of but it's very substantial).

If it's a sub division, or knock over and build, i'd be adding an Authority to Act to the contract, allows you to get started on your planning application, saves time which makes you / saves money.

If it's a reno, i'd be demanding possession prior to settlement / at zero rent - as soon as your offer is unconditional (finance approved).

If it is a buy and hold, and you plan to whack a tenant in it as is. I'd be putting in access clauses for property managers and tenant inspections, and also something regarding any further deterioration to the property during the indefinate probate and then settlement period.

FINALLY - I'd be removing the clause regarding Probate time frame. As it currently reads, I expect if the executors of the estate accept your offer, but don't pull their finger out and apply for and or receive probate in the prescribed time limit, your contract is null and void.

I'd actually be suggesting to the selling Agent, just to have the settlement date stated as "28 days from Buyers Finance Approval or 21 days from the issue of probate, whichever date is latest." This should give the seller all the protection they really need, and they can take as long as they like in getting probate through

I would not sign the previously mentioned clause, as it gives the seller's an out.

 

[Terry_w]

but thats the whole point. In WA as soon as you sign the o&A contract and it is accepted. There is no getting out of it unless the subject to finance clause fails and even then the vendor doesnt get the deposit.

Same in all states. Maybe the future executor is from NSW - usually 10% here.

 

[Ausprop]

the vendors are asking an awful lot considering their weak position

 

[sammmeee]

The plan is all 3..

Renovate, buy and hold (waiting for changes in zoning) then subdivision.

Annexure B
Has an "or other such date as agreed to in writing by both parties" so would that include our subject to finance 21 days from probate being granted..does that override the annexure? with settlement 21 days from finance.

Im happy for the probate to take a couple of years (until zoning comes through) but hate the 10% deposit.

Yes terry might be an interstate trustee

Its not the deal of the century but could be if it takes a while to go through.

 

[Ausprop]

the last time I applied for probate it was no big deal, from memory it was only a couple of weeks, so wouldn't bank on that as a strategy

 

[Terry_w]

the last time I applied for probate it was no big deal, from memory it was only a couple of weeks, so wouldn't bank on that as a strategy

Probate can be disputed. the will may be invalid for example, or a later will found. It could take forever.

 

[Terry_w]

Yes terry might be an interstate trustee

If probate it would be an executor.

 

[mcarthur]

I'm in the same boat (in ACT).
Solicitor removed two vendor conditions which were along the lines of:
1. buyer responsible for tranfer property ownership with govt after purchase [bank wouldn't wear that - they want clear ownership before transfer],
2. settlement to occur "after probate granted" [no time frame!].

and instead added along the lines of:
1. vendor must gain probate, and
2. vendor must transfer into their name, and
3. both of the above must occur within the next 42 days or I may (note the "may") cancel the contract at no cost (ie. deposit returned immediately).

Vendors accepted the new conditions - yay!

Oh yes, deposit 5% rather than 10% requested. Note though that apparently you can't (?!) get around the 10% deposit here - even if there is agreement on less, if there's an issue then the buyer *must* pay the 10% deposit anyway! According to my very experienced solicitor. Could be an ACT thing due to everything here leasehold not freehold?

 

[Scott No Mates]

if you are concerned about the 10% deposit use a deposit bond or add a clause for 50% of interest & deposit to be held in a high interest account.

 

[sammmeee]

I didn't put in an offer. We are used to buying waaaay under market and this wasn't. Too many issues for the deal it is/was. There will be others without the headaches.