Properties sold in probate court can be an amazing deal, as they are always sold at decent prices. But there are risks, and probate sales could take a long time compared to the typical traditional real estate transactions.
If you are a serious real estate buyer, at some pint you’ll likely encounter a probate sale. Properties sold in probate court can be an amazing deal, as they are always priced lower than other homes. But there are risks, and probate sales often take longer than traditional real estate transactions.
As a result, similar with short sales, some buyers keep the probate sale at bay and their real estate agents prevent them from getting their hopes high on actually purchasing a home via probate courts.
What does it mean if a property is in probate?
If a property is in probate, the owner of the property has died and the estate executor, id there is a will, of the administrator chosen by the courts if there isn’t a will, is in the process of sorting out the decedent’s estate, their property, money, including liabilities.
If a property isn’t a living will or secured from probate by some other methods, it will undergo probate until those involved (executor, administrator, probate judge, etc) determine how to settle a decedent’s debts and legally share his or her assets to designated beneficiaries.
Why is a home sold via probate court?
A home is sold in probate court when an individual dies intestate or without creating a will. When this occurs, the state takes charge and administers the property’s sale. The court wants to be sure that the property is marketed and sold at the best possible rate. To ensure this, the court requires some steps, processes and procedures be adhered to. Probate laws can differ from state to state. However, any good real estate agent should be well grounded about probate sales and how they work.
Marketing a probate sales
In a probate sale, the property is marketed the same way other properties are. The probate attorney or the estate rep will hire a local real estate agent, sign a listing agreement, and show the property, like they would a traditional listing.
Generally, the list price is according to the listing agent’s suggestions as well as an independent appraisal ordered and issued by the court.
Making an offer
Any serious buyer may make an offer on the property at any given time. But, in the case of a probate sale, the offer must come with 10% deposit. The estate representative will then approve or reject the offer, like any other sale.
The offer is subject to the court’s approval. Even though the seller may not have approved the buyer’s offer, the seller is not committed to that buyer or their offer. The estate representative via their probate attorney, will then petition the court to confirm the sale. A future date is selected for the sale to be conformed in the court.
Playing the waiting game
As soon as the date is determined, the parties now must wait a minimum of 30 to 45 days. During this period, the court requires that the property be well advertised and marketed with the new accepted price. In California, for instance, the court will take that accepted offer and raise it by 5% plus $500. The total becomes the new probate price to be marketed.
Going to court
In order for the sale to be approved, the court requires that the new buyer, including other interested party, comes to probate court to confirm the sale. The property is then sold ( via auction) with the opening bid being ( in the case of California) the accepted offer price plus the 5 percent, $500 increase.
Sometimes several buyers show up to bid on the property in increment of $5k. If no one shows up to bid on the property, the first buyer gets it for the original price. If the property is sold to one of the bidders, they must release a deposit of 10% pronto.
Contact us
Contact us to provide you with the best probate lawyer for your case. Our probate lawyers are quite experienced, understanding, and up-to-date about probate laws.
