Probate real estate has proven that it deserves a place amongst today’s best acquisition technique. At the very least, investors who can buy houses in probate may find themselves with a sweet deal that is too good to ignore.
But, worthy to note that the process of getting a deal via probate strays from what the average investor is accustomed with. There is a unique process for purchasing homes in probate, and it could be in your favor to learn it.
If for nothing else, having a good insight into the basic tenants of the probate real estate process could put you on the path of discovering your next deal. And what better way to understand the process than to dig up as much info as you can from this article.
What is Probate Real Estate?
Real estate probate is the legal process after a homeowner’s death, where the property either transfers ownership to an individual or is sold. It is another way of describing the proceedings by which a deceased’s will is processed in court, a special court. Regarding real estate, it refers to the former owner’s respective home. Here is a clear explanation.
Based on the Branch Banking and Trust Company, “An executor of the estate is named to take care of the deceased’s affairs and administer the estate throughout the probate process. Assets that are shared under a will (or all assets in the absence of a will or other ownership forms) go through this procedure and are subject to probate. Put differently, probate often refers to the administering of a decedent’s will. More often than not, said administering would come with a home, the same one probate real estate investors are keen to acquire.
Why do investors go after probate properties?
Why would investors show interest in probate properties, particularly when they aren’t present in the deceased’s will? The answer is straightforward: there are great deals to be had. You see, not everyone fancy inheriting a property from a decedent’s relative. The recipient may not be able to cope with the costs that come with the property. Thus, he or she may be willing to quickly cash in on the home; that is where investors come in.
Investors could transform the owner’s lack of desire to own a new property into an opportunity. Their lack of interest serves as motivation to rid themselves of the home, and patient investors may be able to leverage the opportunity.
Probate Real Estate In 4 Steps
The probate real estate process may look complicated between the court proceedings and legal documents. But, probate properties will normally follow similar course. Generally, there are four primary steps to the probate process (though exact proceedings can differ depending on your state). Check out the following list for a better understanding of probate real estate.
Executor of the Estate: For the probate process to start, an executor of the estate must be chosen. Normally, the executor is designated in a decedent’s will, but if not, the court will choose an Administrator to fill the role. The will includes whether or not an heir will inherit the property or if it will be sold.
Property Appraisal: If the property will be sold, the executor will then figure out the listing price for the property in question. The list price will be determined after the property has been inspected. This often happen with the help of a real estate agent experienced in probate sales.
Property Listing: After the property’s listing price is established, it will then be put on the market. The real estate agent working with the property will market it like other homes, using signage, websites, and other effective means to lure high offer.
Approval and sale: As soon as an offer is tendered, the real estate agent will negotiate the term to satisfy both parties. An official notice will be sent (via mail) to all beneficiaries of the estate, establishing a 15 day period to reject the property sale. If there are no refusals, a court date will be scheduled where the sale of the house will be officially executed.
