How to Buy Probate Real Estate
Probate real estate is perhaps one of the best kept real estate investment secrets. Oftentimes, probate houses can be purchased significantly under market value because estate executors do not have the time, money or resources to maintain property upkeep.
Beneficiaries who inherit probate real estate frequently sell the property for less than it is worth. If the beneficiaries live out of town or in another state they can rack up a considerable amount of money in travel expenses, legal fees and court costs associated with settling the decedent’s estate. By selling the real estate they can reduce their expenses or use the proceeds to pay off outstanding debts.
When property owners die their assets are usually transferred to Probate. Once this occurs, assets can be tied up in court for several months or even years. Creditor and tax debts must be settled before assets can be distributed to heirs. Depending on the circumstances, selling probate real estate may be the only way the family can afford to pay debts associated with the estate. Other times, heirs may desire to sell the real estate so they are no longer burdened with maintaining it.
Probate real estate can be purchased directly from the estate executor. If multiple heirs are entitled to the property, they must all be in agreement prior to commencing the sale. In some cases the estate executor must obtain permission from the court prior to selling the property. In some instances, the court may require the property to be sold through a licensed Realtor.
When it comes to selling probate real estate, beneficiaries have two options. The property can either be sold through the Court Confirmation process or by using the Independent Administration of Estate’s Act In cases where the estate is managed by a probate attorney, the property is usually sold through the Court Confirmation process so the sale will be supervised through the court system.
It is relatively easy to locate probate real estate. Wills in probate are public record and be located in local courthouses. Once you locate property of interest you can contact the estate executor by mail or phone. However, this is a delicate matter and contacting the executor should be conducted with the utmost respect.
When making contact with the executor express your condolences and explain you are offering a solution they may not know existed. Do not insult the executor by low-balling the price. Instead, make a fair offer for the property and be prepared to expedite the transaction if they agree to your offer.If the executor is interested in selling their probate real estate, ask them what they feel would be a fair price for the property. Oftentimes, beneficiaries will be delighted to accept an offer of 20- to 30-percent under market value, so let them tell you the amount they feel is fair before making an offer.
Investing in probate real estate can be a profitable venture. However, it is wise to fully understand the process involved. If you are interested in buying or selling probate real estate, seek out probate specialists or private real estate investors who can walk you through the process. Cairnhill 16