Guest blog by Mike Johnson
The process of locating and buying probate properties can be tricky. Education and preparation will give you the best opportunity to snag one of these prized investments.
Property that has gone into probate means that it is being sold after someone has passed away, usually as a way to divide up assets either for a will or to repay money that the deceased owed to others. The process can be drawn out, and the courts are involved, as a probate lawyer will help to settle the process and divide the assets. Someone will also have the task of selling the property and keeping it safe to ensure its value is recouped and the finances shared among the beneficiaries left in the will.
What is Probate Property?
Probate property is the real estate owned by the estate of a deceased person. The probate property is often sold. This raises money to be used to share among people named within the will.
How Probate Sales Work
Probate property, once found, can be either bid for at auction or purchased by making an offer. You will be able to make the offer to whoever is in charge of the estate, but there could be court proceedings to attend once the sale is agreed upon. It’s important that you understand the risks that are involved and the fact that the property may still be shown to others in the hope of getting a better offer.
Reasons to Buy a Home Through Probate
A lot of people buy through probate to save money. Because of the long process and the fact that the property normally has to be sold, it can sometimes be cheaper as a result. This makes it viable for property investors.
Ways to Find Probate Property
There are a few different ways in which you can find probate property to either bid for or to buy at auction.
Contact Real Estate Agents
Real estate agents often have an idea of property that is coming online as a probate sale. If a real estate agent knows you are in the market for this type of property, they can alert you when a probate property becomes available, and you can quickly move to put in an offer.
Contact Your Probate Court
Depending on which state you are in, you might be able to access a list of probate properties online. Alternatively, you can contact the court and ask for any probate cases that have been filed in the last six months. This is a great way to identify potential properties or even get in there before others.
Find Local Home Auctions
Home auctions are often a popular spot for finding probate properties as they need to be sold quickly and stress-free. Find local home auctions, which are often held in association with real estate agents. You might be able to pick up a probate bargain.
How to Buy Probate Property
There are a few ways in which you can buy probate property. You can approach the seller or executor of the estate to try and buy directly, or go through the court.
How to buy a probate property directly?
Simply finding the necessary contacts and making an offer directly. If this is accepted then you can move forward and work with a real estate agent (make sure they know their stuff). The process is relatively similar to buying any other house, at least as a buyer, but there will be court involvement which takes extra time.
How to Buy a Probate Property From the Court
In the court, you will have to overbid on what others have already bid. There is often a load of other buyers interested at this point and it can become a bidding war. Courts also have their own fee structures you need to be aware of. This means you should be aware of those added extras you might have to pay for.
The Time Frame of Locating and Buying Probate Properties
The process can sometimes take around 6 months, but there are examples of it taking even longer than this. If you don’t need to move into the house quickly, this is fine. This is one of the reasons why it is often property developers who find the probate market most lucrative, as they can wait to sell the home on.