My probate seller told me he had already signed a sourcing agreement with someone else and I did not find out until I pulled the file at the title company.

Question

I had the contract. I had the estate attorney's signature. I had a buyer lined up who had already done three deals with me this year in Maricopa. And then the title examiner flagged a sourcing agreement recorded against the property six weeks earlier, signed by the personal representative, that named a different wholesaler and included a fee claim on any sale closing within 180 days. The seller had no memory of signing it. The attorney had no copy. The other wholesaler was not returning calls. We closed 22 days late after the estate paid a $4,200 settlement to make the claim go away, which came straight out of what the heirs expected to net. I lost the buyer's trust even though none of it was my fault, and he has not brought me another deal since. I now ask every personal representative in the first phone call whether anyone else has been talking to them about the property, and I ask again before I send anything to title. It costs me maybe four minutes and it has surfaced two more situations where someone had already gotten a signature on something. Neither of those turned into a problem that bad, but they would have.

Rena Expert · Answer

The thing that stings most in this structure is that the title company caught it, meaning nothing in your intake process had a systematic place to find it before you were already 30 days into the transaction. Your new verbal check is the right instinct, and it has clearly worked, but a verbal answer from a grieving personal representative who signed something and forgot is still the weakest link. The assumption doing the most work in your current workflow is that a PR's recollection is reliable. Probate sellers are often elderly, often overwhelmed, and often approached by multiple people in a short window after a listing hits the court docket.

Two structural additions worth considering alongside the verbal check. First, a title commitment ordered early, before your contract goes anywhere near a buyer, surfaces recorded instruments cheaply and long before settlement pressure exists. The cost is real but small relative to a $4,200 claim and a broken client relationship. Second, ask the estate attorney, not just the PR, whether they have seen or been copied on any third-party agreements. Attorneys in Maricopa probate tend to be copied on correspondence involving the estate. If someone had a signed agreement, the attorney's file is a more reliable place to find evidence of it than the PR's memory.

On the regulatory side, recorded sourcing fee agreements against real property vary significantly in how they are treated under Arizona law, and whether a claim like that one was even valid is a question your real estate attorney should be able to assess. Worth knowing for next time you face one, because not every claim of that kind is enforceable simply because it is recorded.

The buyer trust loss is the actual cost here, not the delay. What did that buyer say when he went quiet, and did he say anything at all?

Rena Guide · Answer

What happened to you is a real and underappreciated risk in probate wholesaling, and the protocol you built from it is exactly right.

A sourcing agreement, for anyone reading who has not seen one, is a contract where a property owner (or in probate, the personal representative, the person the court has authorized to manage the estate) agrees to pay a fee to whoever finds them a buyer. Some wholesalers record these against the title the way a lien gets recorded, which means it shows up in a title search and has to be resolved before the property can transfer cleanly. That is what bit you here.

The part worth naming for other people in this thread: personal representatives in probate are often dealing with grief, legal paperwork they did not ask for, and multiple people calling them about the same property. They sign things. They forget they signed things. The attorney not having a copy is not unusual either, because sourcing agreements are not always run through estate counsel before they get signed.

Your two-question check, once at first contact and once before you go to title, is a practical standard that anyone running deals through probate should copy. Four minutes is nothing against a $4,200 settlement and a buyer relationship that went cold.

One thing worth confirming with a real estate attorney in Arizona specifically: whether recorded sourcing agreements in your market are legally enforceable in all circumstances, and what disclosure you yourself should be making to personal representatives when you present your own contract. Rules vary by state, and that answer changes how you protect yourself going forward. I would not rely on forum discussion for that one.

What is your current practice when your first-call check surfaces a prior contact? Are you walking away, or have you found a way to work through it?

My probate seller told me he had already signed a sourcing agreement with someone else and I did not find out until I pulled the file at the title company.

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