What is Probate?
Probate sales happen when a homeowner dies without a will, hence, having the property sold so its assets and proceeds can evenly be distributed to the remaining family members. Either the executor of the will or a real estate attorney is required to handle the said matter. The attorney or the representative is most likely to hire a real estate agent to sell probate real estate to potential buyers.
Laws on Probate Real Estate Vary
Probate laws in each state vary, so do not forget to ask your attorney just in case there is a need for a proceeding to occur. Although, some states have implemented a set of laws called the Uniform Probate Code. The UPC discloses an easier and quicker transaction than the usual probate process.
Documents to Start the Process
As the administrator, be ready to prepare different documents such as (but not limited to) the following: application form or letter, death certificate of the homeowner, and the original copy of the will. The application shall include different information on both the homeowner and the family members and beneficiaries.
Remember to ask your local probate court for the official list of the documents you need so you can already begin with the selling process.
As a Buyer, Is Probate Real Estate Sale for You?
In most cases, the real estate properties in the probate market cost less than the actual market value of the houses; however, the process is often longer and more complex. If you need to buy a house quickly, then probate real estate may not be suitable for you.
But, if you have the time to partake in a process which can possibly give you some good benefits, then probate sales may be for you. Probate real estate sales require a huge amount of patience.
Probate Sale’s “As Is” Aspect
Although a probate court actually oversees the process, it is still not required for them to inspect and repair the property before it is considered for selling. You must know that the house will be bought “as is.”
To avoid numerous dilemmas on your house in the future, as a buyer, it is important for you to know the situation of the property before you write an offer. You may need to shell out money to have the real estate thoroughly inspected. You do not have to worry as this inspection is surely worth your time and money.
How to Make an Offer?
Like traditional real estate sales, you need to make an offer for the house you want to have. In probate real estate transactions, buyers need to give a deposit amounting to 10% of the offer price to secure a spot for the bidding of the house. This however, does not guarantee that you will win in the bidding process. Once you are confirmed as the final buyer, this deposit will then be added to your house payment.
For those who will not be awarded as the final buyer, you will have your deposit back. But if you decide to pull out from the process before the bidding, then the deposit becomes non-refundable.
Usually, probate property sales undergo court biddings to ensure that the property will be sold to the right individual. Once the court session happens, every party who made an offer shall attend the hearing. This hearing is in an auction-style set-up. The various buyers will continuously raise their respective bids until a single bidder remains and outbid everyone.
Also, be prepared as delays and other glitches may happen during the course of the sale.
Patience is a Virtue
Unlike a traditional home sale, probate real estate sale is significantly longer. It is not a straightforward process; you will have to exert a tremendous amount of time to acquire the property that you like.
Sometimes, probate court sessions handle many cases in a day, thus the need for you to be patient while waiting for your turn. It may take months for the official buyer to obtain the final approval for probate real estate sale. Also, probates are not flexible when it comes to contingencies so it is the buyer’s responsibility to ensure that he or she has the financial capacity to immediately pay for the real estate – once it is awarded.
One thing to take note of in probate real estate sales is that there is absolutely no assurance that you will be the rightful owner of the property you kept your eye on. You will be battling out with other eager bidders on court, and the seller would not adjust to your timeline and other attempts for financial negotiation.
For this, you have to prepare meticulously. Review the rules and terms of sale and ask for advice from your probate-experienced agent so you would be fully prepared in the court session.
Prepare the Checks Beforehand
The final buyer shall present the decided bid amount through a cashier’s check. So, make sure that you have a check payable to the respective person or individual with at least 10 percent of your maximum bid amount. If you fail to bring this check, then you would not be able to buy the property.
Finally, once the buyer proved that he or she has the financial capacity for the probate house sale, then the contract signing will happen.
Do not forget to ask your attorney and realtor for advice on your probate-related decisions. The process may be complex and lengthy, but it also has benefits which can be reaped in the long run.