How to Buy a House in Cash From Family Member of a Deceased Owner

Buying a house with cash allows you to move quickly to close the sale.

Buying a house with cash allows you to move quickly to close the sale.

Buying a house with cash from a family member of a deceased owner makes for a speedy sale, but it requires close attention to detail since it moves so fast. You might be tempted to quickly come to a verbal agreement and exchange cash for the property. However, creating a formal written contract, and researching the potential liens and liabilities on the house protects you from later legal headaches. Even in the most friendly business exchanges, emotions can interfere, so it's wise to use an impartial outside party to handle the cash transfer.

Title Holders

Even though the seller has family ties to the deceased owner, it makes sense to verify that he has the legal right to sell the property. The deceased may have a trust that transfers the house to other trust members, or a will that specifies that a court-appointed executor must handle the house sale. The first step in buying the home is to ask the family member for formal documentation of the legal right to dispose of the house. This proof might include a copy of a trust, a small estate affidavit or a will filed with an attorney or probate documents filed with a court. The escrow, title and county recorder also need to see this documentation as well as the death certificate of the deceased owner.

Liens and Attachments

The deceased may have used the house as collateral for loans, or there may be mechanics' liens on the house attached by companies for work done on the home. Ask the family member to order a title report for the property. This document lists home loans and liens placed on the property. Also check for federal, state and local taxes owed on the property. The relative must pay all liens and attachments before the house has a clear title for your purchase. If you pay the liens, include this as part of the sales agreement and transfer the money only during the escrow process.

Written Agreement

Write a formal sales agreement to purchase the house. This document should list the physical address of the property and the legal description of the location, date of the agreement and an expiration date for the contract. Other essential elements include a sales price, your cash payment and the amount of your deposit submitted with the offer. The agreement also lists the division of the property tax owed on the house, any association dues owed and any payments for mortgage left unpaid by the deceased. If you plan to have the home appraised or inspected for damage, state this in the sales agreement. Outline the specific division of buyer-seller payments for escrow and title fees and how real estate agents, if any, receive commission from the sale.

Impartial Control

An escrow account protects you and the deceased's family member, ensuring that the sale follows your written agreement for releasing your cash and transferring the property. Escrow companies provide licensed assistance to ensure your cash is safe in the sales transaction. Title companies handle the escrow process in some areas. Your escrow officer knows the legal requirements for transferring a property in your area and stores all the documents for the sale. Depending on your sales agreement, both you and the relative need to place cash in an escrow fund in addition to your original deposit filed with the sales agreement to use to pay fees for the sale. Your escrow officer, for example, must file the property title transfer and pay the county documentation fees from your escrow account.

Final Transfer

The final house transfer typically happens quickly in a cash sale. Your escrow or title officer reviews the sales agreement to ensure all of the conditions and terms have been met, and has both parties sign the legal transfer papers. The officer then releases your cash to the family member. You receive a copy of the legal title to the property and the keys to the house.


About the Author

Lee Grayson has worked as a freelance writer since 2000. Her articles have appeared in publications for Oxford and Harvard University presses and research publishers, including Facts On File and ABC-CLIO. Grayson holds certificates from the University of California campuses at Irvine and San Diego.

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