In the state of Missouri, a seller in the middle of a sales contract died. The closing time is not yet lapsed and all the contingencies on the buyer side is fulfilled. There is will in place and an executor named for the estate already. The son (named executor) can not legally sign for the deceased seller yet. The buyer's do not want to continue with the contract and wait further and possibly go into probate. What is the fastest way to get the buyers out of the contract? Does the contract die with the sellers death? 9the seller obviously can not sign to close and would be in default) At what point does the seller default on this contract in this scenario? Also, there is earnest monies in place. Will the buyer's have to wait until the son can legally sign to release this contract and the earnest monies or how can we get the earnest money back fast without a signature, or does it have to go to arbitration? If it goes to arbitration, at what point in the state of Missouri does the third party company have to return the earnest money back to buyer?

Hello kim:

All very good questions. I'd love to know the answers. I suggest they're too specific for a detailed examination of your case without knowing the contents of your purchase agreement. Your rights, if any, should be spelled out there.

In any case, and no matter who has the law on their side, you're going to need an attorney on the ground to straighten it out. I would absolutely see one TODAY.

excon

Thanks so much for the response. I so appreciate it. I am very aware of possible consequences etc. for the buyer and seller within the specific contract terms, it's the mixed up stuff after the death of the seller that is concerning me. Thanks again for the response. K

Hello again, k:

Even if a lawyer had prepared the purchase and sales agreement, I don't know if the death of the seller would have been contemplated.

This could get messy, although who owes who, how much and why isn't difficult to ascertain. That doesn't mean it will get handled quickly. Hopefully, your lawyer can cut through the chaff, release you from your agreement, and get them to send a check.

excon

Hey there,
Yes, that is exactly what I am hoping...
K

First, unless the contract specifically makes provision for the death of the seller, then the seller's estate is responsible for fulfilling or cancelling the contract. The executor of the estate, once affirmed, will have the right to continue and execute the contract.

So the only real question is how to get the executor affirmed. Usually this is done by the probate court. But if there is no desire to probate the estate (its not large enough), then, if the will assigns and executor, then they can assume their duties almost immediately. The executoir would sign any documents as:

John Smith
Executor; Estate of Fred Smith
As per Will dated xx/xx/xxxx

I'd be interested in whether the house is specifically mentioned in the Will - it might not be the Executor's to sell.

I looked quickly at the law in several States and found that if the executor will not execute the Deed and complete the transaction you need to file a specific performance lawsuit requiring the Executor to do so. I realize this is not what you asked - you as the purchaser would like to rescind - but it appears that both parties appear bound by the Contract as the executrix simply takes the place of the Seller.

I did not specifically find anything about Missouri. As I said, other States simply put the Executor as sort of a power of attorney over the deceased seller and the transaction goes forward - the Executor is not allowed to back out.

(I'm surprised; I would have "guessed" that the contract died with the seller and I would have been wrong.)

I would think, however, that if the Estate cannot meet the closing date, particularly if it's a "time is of the essence" contract, that would get you out of the contract.

What does your real estate broker say?

The house is mentioned in the will. The executor, if he is not able to close by the closing date would be in default. That however, is a long time away. Waiting until that time is not fast. We have since found out that for sure the heirs have to go through the process of assigning the representative of the estate which and that may take 30 days or so at minimum, even to sign anything.

Thanks for the response... can you think of another way for the buyers to get out without the executor signing and or before the executor becomes the assigned representative of the estate, for fast timing purposes?
K

And of course how long it takes to get that executor affirmed... anyway, thanks for the comments and response!
K

The house is mentioned in the Will? I meant is there a specific beneficiary for the house? How is it mentioned?

Now, I can't think of any way for the buyers to get out - unless you have a "time is of the essence" clause.

If the deceased person was the only party selling the property then the contract would have died with him/her. In which case a simple letter to the deceased seller's representative, i.e. realtor or attorney, stating your intention of not completing the purchase of the property should be sufficient. Also advise that you request a prompt refund, with interest, of all deposits paid to date (the seller's agent should be keeping them in escrow).

The buyers can just back out and lose any escrow money they paid in.

But the death of the seller does not effect it, and if they get close to the date, the judge can easily allow for the estate to OK the sell.

Do you have a source? My research indicates exactly the opposite -

I don't have a "source" per se but I'd think it'd be a matter of common sense ; when an individual signs a contract, should that individual die prior to it's execution then any contract signed by him/her would become null and void, unless, as I stated in my first response, there was another party involved. For example, if my wife and I decide to sell our home, enter into a contract with a buyer and both sign as sellers, then I die before the sale is completed, my wife would have the right to complete the sale under the terms of the original contract as a co-signer and the buyer would have the right to complete the purchase under those same terms. But, if I enter into a contract solely on my own (such as with my employer), then I die, my wife or any other third party does not have the right or the responsibility to complete the terms of my contract. For example, my wife wouldn't have to give my employer the required 60 days notice to terminate my employment with them ; that's absurd. Likewise, they wouldn't have to keep paying my salary to my wife. The contract between me and them becomes null and void upon my death. Of course she'd get my pension insurance, social security death benefits and whatever death benefits are available through my health insurance but that's a different issue not related to my contracted salary per se. I'd think the same would hold true when one signs a contract to sell real estate then dies. Even though it involves real property and not an employment situation, the fact remains that the executor of the deceased seller's estate, not having been a party to the original contract, has no obligation to complete the execution of said contract. Likewise, then buyer then has no obligation to complete the contract on his/her end of it. Now I'm sure that the executor of the estate has the option of completing the sale of the property as negotiated on behalf of the deceased's estate and for the benefit of the buyer but is not required to do so.

Nope, it's not common sense, it's law in many States.

The Executor takes the place of the seller and the "deal" goes forward. If the Executor/seller backs out he/she is in default and subject to a lawsuit for failure to perform. The executor is not a third party in this situation; the executor simply takes the place of the seller - also as a direct party.

I would venture a "guess" that the law is written this way to protect the purchaser who, in theory, has spent time and money and intended to purchase the property, could suddenly be out everything - including a place to live.

I understand the situations you posed but real estate law is very, very different from employment law, matrimonial law, contract law, etc. There is absolutely nothing in common - you are comparing apples and oranges - between a situation where you would die and your employer would hold your WIFE to your 90-day "required to give notice" provision (which I would agree would be bizarre) and a real estate transaction. Your wife (in theory) is not able to perform your job duties and could not step into your place; this is not the case in a real estate transaction.

In this particularly situation it appears the purchaser wants out and is using this as a hook - which he/she is entitled to do but would have the consequences.

If I am incorrect, please let me know - and, again, common sense and all things legal are very often two different issues.

Hello cianci:

That's just not so. Your estate IS held accountable for your agreements.

It's true, you don't have a CONTRACT with your employer to give him 60 days notice if you die. But, if you had a contract with him that states he owes you money that hasn't been paid, or that you owe him money, your estate will be held accountable for THOSE contracts – both paying and collecting. Just the same as your credit card bills aren't wiped out when you die, or any other obligation you might have, like a contract to sell your house.

Nope, to the degree that an estate is able, it must adhere to the decedent's obligations and responsibilities.

excon

Nicely done. I'd give you a greenie but I have to spread it around some.

Basically, the estate continues to own the property. The executor is merely the tool that facilitates completion of the transactions.

This is all very interesting. I was just always under the impression that a 3rd. Party couldn't be held responsible for another's agreements but I guess that isn't always so.

You are correct when the contract requires that a person provide "personal services" that are unique to that person. Like when a singer contracts to perform in a concert. If the singer dies their estate can't be forced to find someone else to perform.

But since the estate of a property owner still owns the property after the person's death, they are capable of completing the transaction. It's not the executor who is held responsible, it is the estate that is responsible. The executor is merely the tool.

Hello again, cianci:

It really isn't a 3rd party. It's still you even though you're cold as ice. Plus, if your estate has a taxable event after you're dead, your cold cold body is going to pay taxes too.

Yup. If you thought the government couldn't reach into your grave and dun you - you thought wrong.

excon