Buying A House In Probate
– Everybody loves a good deal and buying a house in probate can be a fantastic opportunity to own property with a lower cost to acquire it. Purchasing a probate property means that the property was once owned by a person now deceased.
There Are Two Ways That A Property Can Go Into Probate:
1. The heirs of the deceased inherit the property. Many times heirs want to sell a property quickly so they aren’t responsible for insurance, taxes, maintenance and other associated costs of homeownership.
2. There is no will or heir. In this case, it’s the state’s responsibility to sell the property and this often means the property will sell below the actual market value.
Real estate listings don’t actually state that a house is in probate. Real estate insiders will keep a pulse on the local probate market and watch for obituaries to see potential probate property becoming available. Many real estate investors utilize probate sales as a primary means in which to purchase investment property.
Often an estate representative or probate attorney will hire a real estate agent to market the property just as they would a traditional real estate listing. When an offer is presented, the estate’s representative can either accept, counter or reject the offer. There are specific rules to follow and every state is different. So, having a knowledgeable person on your team who knows your state’s procedures is key.
Things To Think About Regarding Real Estate In Probate:
3. Learn as much about the property as possible. Because a property is sold in as-is condition, make sure you have the property thoroughly inspected before committing to purchase it. Additionally, if any debt is attached to the property, you could become liable for it without even knowing it existed. Do your homework!
6. Be prepared to go to court. While in some cases you can make an offer on the property and it is accepted while another scenario may involve appearing in court (in some states) to overbid somebody else’s offer. When this takes place, you must be prepared with money in hand to complete the transaction.
7. Many probate properties are in need of “TLC”. Often times elderly homeowners fail to make necessary home improvements on account of a tight budget, physical condition or they are unable to recognize that the property needs repair. Make sure that you recognize problems (and costs) that could arise from neglected home improvement projects.
8. While buying a property in probate can be a financially savvy move, it can also be overwhelming with all of the details and court-regulated steps involved. Keep in mind that probate laws will vary from one state to the next. It is always a good idea to consult a knowledgeable real estate professional that is well versed in the ins and outs of probate sales.
There are pros and cons that go along with purchasing probate property. In some cases, you can find probate sales that are great bargains. On the flip side, some can be overpriced because of greedy heirs. Whichever the case may be make sure that you know the practice of probate real estate in your state and have a knowledgeable real estate professional on your side to help guide you through the process.
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