How to purchase probate properties
Purchasing probate properties are potentially profitable investments. Real estate in probate is often sold in as-is condition for below-market price, when heirs want to turn their properties quickly into cash without having to take on any additional repair work. Heirs of a property would also like to complete a sale as soon as possible even at a bargain price, as they try to avoid inheriting any burden of having to pay property tax or even a mortgage on a property.
In other cases, an expedient sale may be needed when proceeds from a property sale are necessary to pay the estate's outstanding debt. In general, purchasing probate properties is a buyer's market -- meaning you have the advantage.
Locate probate properties. Investors can find probate properties through a real estate agent or self researching. Real estate agents have access to local real estate listing information and in this case, probate listings when the court requires a property be listed through a licensed realtor. Methods of self-research include checking obituary notices from local newspapers against local property ownership records to find out whether a deceased person owned a property, or contacting a local courthouse to get a list of probate wills that involve real estate properties.
Check the status of the property in probate. The legal process of probate in court goes through stages including first proving a written will of the deceased person, putting all assets under probate, and finally following the will in selling and dividing the person's estate. Depending on the size of the estate, the amount of time that a court takes in its proceedings may vary. In order for potential buyers to proceed with their offers, the court, the executor or the heirs must have first given the permission to sell the property. The court maintains case records on such information at its clerk office.
Make a purchase offer. The property must already be appraised by the court. The seller sets the asking price based on the court appraisal. Sale of a probate property can be either a public auction or private sale. In the case of a private sale, the asking price must be at least 90 per cent of the court-appraised value. Bids, or purchase offers, must be in writing and the buyer should follow the standard Probate Purchase Agreement when entering a contract.
Obtain court approval. One major difference of purchasing probate property is that a sale is not finalised until the court has approved it. To obtain court approval, a petition for confirmation of sale of real property must be filed with the court no more than 30 days after the sale of the property. The court has at least 10 days to hold a hearing and confirm the property sale.