Trying to sell during this mess

[Anonymous]

My dad passed away in January and it took an incredibly long time to clear out his house and figure out who his mortgage company is. I finally got a late notice in the mail that uncovered that, but the company said they need a will to talk to me despite the fact that I emailed them the court order appointing me estate administrator that explicitly states there was no will.

That's not the point, though. His house is basically uninhabitable and is cash only. I put it on the market in early March, right when showings were halted in my state. We got a full-price cash offer soon after they could show again, no contingencies, but the buyer walked the day of signing. Now prices are dropping like a rock. There is around 80k in equity (or was in a normal market) but the  mortgage is late and my dad died with nothing but the house. So if I make payments they'll have to come from my own funds with the hope I'll get it back. Considering that he had about 40k in bills and rising by the day as mail comes in, we're talking about a max of 40k in equity that will decrease by about $900 a month as I make the payments. The estate is split between me and my step-brother but he's not willing or able to help make the mortgage payments. 

so for those of you in the industry, is this decline going to improve anytime soon? My dad lived in a poor rural area. I'm not sure it's going to bounce back and I'm afraid of dumping money into a losing bet.

[NC_Mtg_Loaner]

First of all, I am sorry for the loss of your Dad.  I know this situation is tough because of the familial association with it all which doesn't make it any easier.   Now, I'm not an attorney and I didn't sleep in a Holiday Inn Express last night, but I am a licensed mortgage loan originator so I understand where you're headed and what you might be faced with regarding this, so I hope it helps.   

The decision you'll need to make is whether or not you feel it's worth spending $5,000-10,000 or more, over the next six months to a year in order to reap the $40k+ in equity that you share with a sibling that doesn't seem to care about obtaining.    I think this amount would be a short term investment  and that you'll likely see a pretty quick turn around because the market will return to some form of normalcy, but if there's anything you can do to enhance or further make this home habitable you certainly should be able to generate a better rate of return. 

Now, not everyone is cut out for "flipping" properties, so if you aren't, perhaps you know someone that does?   You might be able to negotiate a deal in order to partner with a company that does?   Or, if you can do some of these things yourself you can enhance the value and make the home a wee bit more "move-in ready" in order to obtain an offer closer to full market value when the market recovers?   Check and see if the nearby suburban area has a real estate investor groups--you might be able to partner up with someone on this project.  

If you aren't sure what's critical to work on/or if you want to go this route yourself--some of the smaller cosmetic projects from a home inspectors' recommendations would be a great place to start unless you have some valued opinions from your listing agent. 

Otherwise, I would have your estate attorney (Go ahead and invest/hire one--I know you mentioned there was no will and you had a court order, but I think you need one) draft up and deliver some paperwork to the mortgage company in order to stop their foreclosure process which will happen when you get 3 or more payments behind unless you keep making those monthly payments.   If you don't make those payments, you might be able to obtain a forbearance due to COVID 19, but you'll ultimately need to pay them at some point so be prepared. 

[Anonymous]

Thanks for the advice, it's really helpful. I do have an attorney handling the estate but since we thought the home was closing I wasn't worried until now. 

It's truly uninhabitable. A manufactured home built in 1989 with zero repairs done, rot, sagging/holes in floors, appliances are all shot, etc. The only reason it's worth anything is that it's 1 acre of land and there's only 26k left on the mortgage. It's off a dirt road, it's just awful. Definitely way beyond the kind of flipping I could do. 

I hadn't thought to ask the lawyer what he can do about the looming foreclosure, so I'll ping him ASAP.  

[NC_Mtg_Loaner]

Has the land been appraised?