[WSBAPT] Selling Property from Estate using a Deed of Trust (foreclosure risks)

Thu May 4 10:45:24 PDT 2017

I would not want to defend a Personal Representative who distributed a sellers interest in a real estate contract to heirs who were unhappy with it.

I think this is problematic whichever legal form the Personal Representative as seller utilizes if the heirs are not in agreement.

Heather

Heather S. de Vrieze
Attorney-at-Law
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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Mike Winslow
Sent: Wednesday, May 03, 2017 3:49 PM
To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Selling Property from Estate using a Deed of Trust (foreclosure risks)

Because the estate owns the property, it has the ability to utilize the Real Estate Contract as the form for Seller Financing. The procedures for recovery of the property (called a Real Estate Contract Forfeiture) are considerably less expensive and cumbersome, with a shorter time line from commencement of the procedure to recovery of the collateral. If the property is to be owner occupied residential property, then the DOT Foreclosure Act imposes substantial pre notice requirements and long time lines (additional 60-120 days) to complete the recovery process once default occurs. I routinely recommend against client doing DOT based security interest for owner occupied property loans.

Recommend the LPB 45, available at the forms section of the WSBA website in the LPO section. I prefer the 45 over the 44, as it has greater protections for the Seller, even though you will see the 44 called "Residential Short form".

I would recommend that a credit check, financial affidavit and copy of three years' tax returns be reviewed as a condition of approving the buyer's right to finance. Beware the need for consent in writing to run credit checks.

Michael A. Winslow
1204 Cleveland Ave.
Mount Vernon, WA 98273
Ph. 360-336-3321
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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of G. (Gus) Benjamin Lindsey III
Sent: Wednesday, May 03, 2017 2:23 PM
To: 'WSBA Probate & Trust Listserv'
Subject: [WSBAPT] Selling Property from Estate using a Deed of Trust (foreclosure risks)

Hello,

PC (personal representative) is considering an offer buy real property from an estate using a deed of trust. (Seller carrying the loan balance)

Seller/Personal Representative wants to know how "difficult/expensive" it is to regain possession of the property in the event of a default.

While I handle some property related matters, including ejectments, I am not familiar with the foreclosure process.

Anyone have insight on this from the perspective of an estate? My initial reaction is that this may not be the best approach for the estate but that may be based on some past horror stories! My typical probate client does not want this approach so this is  new one for me.

Sincerely,

G. (Gus) Benjamin Lindsey III
Attorney-at-Law
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