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

Thu May 4 11:29:56 PDT 2017

Agreed. I was just addressing the question about the selection of documents.
As to the wisdom of such transaction, I would recommend in writing to the PR
that they obtain written consent of the heir that will receive the interest
in the contract before proceeding. Some heirs may prefer the contract if it
is well negotiated and returns a good interest rate. But that is a question
of risk tolerance for the "investor". For the unsophisticated heir the
seller financed deal is most likely not a good choice; but some heirs may
want the investment instead of the cash.  Some heirs may actually have more
knowledge and risk tolerance than their legal counsel on this opportunity,
so respectfully suggest that we consider giving the heirs the option if
there appears a reasonable possibility of interest.

If the property is hard to sell or obtain financing on, then a seller
financed deal may be the only real possibility for a sale; so that may be a
consideration, as well.

Back in 2002 I wrote an article for RPPT Newsletter, which in 2003 became
the basis for an RPPT Real Estate Seminar topic about Seller Financing with
sample forms, etc.
The newsletter article is available at the RPPT website archives; Summer
2002 issue. It is members only access FYI.

Michael A. Winslow
1204 Cleveland Ave.
Mount Vernon, WA 98273
Ph. 360-336-3321
Em. Mike at winslegal.com

This message is from an attorney, so it's confidential. If you are not the
intended recipient, it's too late to stop reading this message, but you may
not use it for any improper purpose. Huge Disclaimer available upon request.

From: wsbapt-bounces at lists.wsbarppt.com
[mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Heather deVrieze
Sent: Thursday, May 04, 2017 10:45 AM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Selling Property from Estate using a Deed of Trust
(foreclosure risks)

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
cid:image001.jpg at 01D013C2.30F35160
3909 California Avenue SW
Seattle, WA 98116-3705                          
(206)938-5500 
 <mailto:heatherd at westseattlelaw.com> heatherd at westseattlelaw.com 
 <http://www.westseattlelaw.com/> www.westseattlelaw.com 
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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
Em. Mike at winslegal.com

This message is from an attorney, so it's confidential. If you are not the
intended recipient, it's too late to stop reading this message, but you may
not use it for any improper purpose. Huge Disclaimer available upon request.

From: 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

The Law Office of G. Benjamin Lindsey III
2012 Grade Road, Suite 202
Lake Stevens, WA 98258

Phone:   (425) 263-9585

website: www.gbl3law.com <http://www.gbl3law.com/> 

Employment/Labor Law     Construction Law     Civil Litigation     Estate
Planning      Probate     
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