I’m just finishing up an estate sale for a client and a new twist came up that I just have to write about. In this case we had prepped everything in advance to make sure that estate issues would not impact the sale – we had the estate planning attorney on board, we had reviewed documents ahead of time including the preliminary title commitment; we had our proverbial “ducks in a row.”
The house went on market and we got a buyer to purchase it. All was going well in the transaction till we got to the last days of the contract. For some reason the lender decided that they must have a particular paragraph removed from the title report. I will post it almost verbatim below but will remove client details to maintain privacy:
Pending probate proceedings in —– County Superior Court of the estate of —–.
date of death 00/00/000
case number 00000000
personal representative – ****** (name of executor)
attorney for the estate – pro se
The Personal Representative(s) has/have been granted non-intervention powers to sell, convey or mortgage the property.
So, here’s the rub…. the lender wanted us to remove this part of the title report. Here is the reply I sent to them:
“There seems to be some miscommunication as to what Paragraph 6 really is and its function in the title report. I just got off the phone with Judy Williams at Chicago Title and these are the points that she and I discussed. It seems to me that there is either someone at ***** Funding that either doesn’t understand estate sales/probate, or there is some other issue going on, because ****** generally has not had a problem understanding this issue before when working with the title company.
1. Closing out this item (paragraph 6) as a special exception is not something you want to do for a probate sale. When probate is closed the executor can no longer sell the property. This needs to remain as part of the title report.
2. The lender’s policy will not have this item included.
3. Probate is not like a divorce where the proceedings and a divorce decree must be complete before a sale can occur. It’s actually the opposite for probate cases like this one.
4. You have documentation showing that ********** is the executor of the estate and he has full powers to sell the property.
I would like to ask for the name of the person at ********* that you are working with so that we can get them on the phone with Judy Williams at Chicago Title to get this sorted out. There is no rational reason why this should be holding up the lending process unless we have someone working the file that is unfamiliar with estate sales.”
We did get the condition lifted but only after the title company had to do something that they normally don’t do in these scenarios. The supplemental commitment basically just stated in print that the lender policy would not include that provision. It was ridiculous and superfluous for the lender to ask for it, but at least I had a good relationship with the title company that they did this to move things along. The attorney involved in this transaction agreed wholeheartedly as well. You don’t want to close out probate! It must be open to transfer the property under the estate.
This situation also shows how nervous lenders are nowadays. They’re doing more “CYA” work than ever before since the craziness and media bashing enveloped their industry starting last August.
