Tiffany Carver, with Fidelity National Title Company's Tukwila, Washington office, received a purchase contract in the amount of $502,000 which reflected the seller as "The estate of Sally Simple." She reached out to the listing agent and requested the death certificate and Last Will and Testament for the deceased seller.
The following day the sales representative from Tiffany's office went to meet with the seller's representative and was told, "Oops, the seller is not actually deceased. I am her nephew and I am helping her sell the property, here is my power of attorney."
The sales representative left with the power of attorney and returned it to Tiffany. Tiffany sent the power of attorney to the title officer to review and approve. The real estate agent prepared an addendum changing the seller to "Sally Simple" and the nephew corrected his signature on the purchase contract to reflect him as the attorney–in–fact for Sally.
The sales representative from Tiffany's office went to meet with the nephew to sign the closing documents. Tiffany included a power of attorney affidavit in the closing documents, confirming the seller was still living and the power of attorney had not been revoked.
The nephew signed the affidavit, as well as the other closing documents. He provided wire instructions for his aunt's bank account to wire the proceeds. His name was on the account as well as his aunt's name.
On the day of closing the buyer's new lender issued funding conditions, one of which was an addendum to the purchase contract changing the seller credit toward buyer's closing costs. Since the full amount of the credit could not be used, there simply were not enough charges to use up the entire credit. The amount of the credit needed to be reduced.
The seller's nephew was angry he had to sign one more form and refused. The real estate agent called Tiffany to explain the situation and to see if she could convince the lender to fund without the addendum. The purchase contract said the seller would credit, "…up to $4,500 towards closing costs," so the agent did not feel it was necessary to prepare an addendum.
During the conversation, the real estate agent casually mentioned to Tiffany the nephew had a death in the family and he had a lot going on. The real estate agent said an aunt passed away and the whole family was in town for the funeral services.
Tiffany hung up the phone with the real estate agent and immediately thought, "Wait, our seller is his aunt. Surely it was not her that passed away." Tiffany used an internet search to pull up the obituary for the aunt. The obituary named the nephew so there is no question that the aunt was the seller.
Not only did the seller pass away, she passed away at the very beginning of the transaction. In fact, according to the obituary she passed away the day prior to the nephew telling us his aunt was not deceased and he was helping her sell her property.
It turned out both real estate agents and the buyer's loan officer were all aware the seller was deceased, but they collectively decided it was easier to close using a power of attorney. Tiffany halted the closing and insisted the parties provide a death certificate, lack of probate affidavit and a complete copy of the Last Will and Testament.
Tiffany received the documents and turned them over to the title officer to review. The title officer determined the estate needed to be probated. The title officer discovered the documents named two children and twenty–four grandchildren that had been completely left out of the aunt's Last Will and Testament.
The nephew did not let us know his aunt had passed away because he did not want the children and grandchildren involved. That is why he decided it was easier to sell the house using a power of attorney, rather than probating the estate and then selling the property as the personal representative.
The estate was probated, and the nephew ended up being named the personal representative for the estate. Tiffany was able to close the transaction two weeks later. As a result of her heroic efforts, Tiffany was awarded $1,500 from the Company.
MORAL OF THE STORY
The power of attorney used to initially conduct the closing by the nephew did not survive the aunt's death and was no longer valid. Had the transaction closed without a probate of the estate, the children and grandchildren of the deceased aunt could have protested the sale. Our Company would then be in a position to protect the insured owner against any legal action to reverse the sale.