If you are an eager investor willing to make substantial gains in the real estate market, probate sales should always be on your target list of properties. One of the key qualities of a successful real estate investor is to locate and purchase properties available at lower market prices to sell them at higher prices in the future. There are multiple ways to get hold of such lands and properties that are lowly priced owing to the history involved. For instance, buying a distressed property is one such viable investment wherein you can make great profits with minimum risks involved. Real estate properties that fall under the probate, distressed, and foreclosures category are often termed as the best deals for investors due to multiple factors such as price rebates, quick sale, credible ownership, etc.
What is a probate sale?
Similar to foreclosed and distressed properties, probate sales are a treat for real estate investors that gives them an opportunity to make a profitable property purchase. A probate sale refers to the legal sale of a property after its owner dies without a will or any bequeathed heir. Properties whose owners are dead without leaving a will or have some sort of debt are often put under the probate sale category where the money received from the sale is used to clear the debts while the remaining is distributed among the beneficiaries. As soon as such properties are identified, they are sent to probate courts for the further sale process. An executor is appointed by the probate court to carry out the sale process until a genuine buyer is finalized.
Probate Sales: The process
The probate sales process quite differs from that of a foreclosed or distressed property. Probate laws may differ from one state to another; however, the standard sale procedure remains constant. Irrespective of the varied reasons or processes, the primary intention behind selling such properties is to make quick sales and get a fair exchange value. Knowing the entire process can help you be prepared for making valuable investments through probate sales. The general steps involved in the process are discussed as follows:
➔ Appointment of executor & real estate agent: Once the property is transferred to the probate court, the court appoints an executor who is generally the closest living aide of the deceased owner. They are given the responsibility to look after the entire sale process up until a genuine buyer is finalized. The executor can be any regular person who may or may not have an idea about a probate sale. Hence, they hire a real estate agent who helps to support the sales process. These agents have a strong network and can advertise the probate property to a number of potential buyers.
➔ Property appraisal & listings: Every property be it foreclosed or distressed property must get an appraisal to determine its adequate market value. Right after the executor and real estate agent are appointed, the property should be appraised to figure out its minimum sale value before listing it out for sale. Property listings are essential to connect with potential buyers. An experienced real estate agent can have the property listed on various credible websites to attract genuine buyers at the earliest.
➔ Get offers & court approval: After the property is listed, buying offers are made to the executor and he/she has the right to accept the highest bidder unofficially. However, it is important to note that the buyer must be ready with 10% of the property value as a down payment. Once the buyer is selected, the petition is raised in court for approval. The court assigns a date of confirmation on which all interested buyers must be physically present. The property is sold in an auction format until the final bidder is decided.
➔ Contract signing & property inspection: As soon as the final bidder is finalized, a contract is signed between the buyer and the executor. After the contract is signed, the buyer can request a complete property inspection to determine any flaws or issues before taking ownership. In case any major issues are noticed, the buyer can immediately retract its purchase. However, they end up losing the deposit amount. If no discrepancies are found during the inspection, the property is closed and ownership is transferred within 15 days post the contract signing.
Why you should invest in probate sales?
One of the key advantages of investing in a probate sale is the lowly priced properties. At a time when the real estate market is skyrocketing, purchasing properties at low prices for future sales is a great investment that can yield significant profits. Unlike other regular sales, a probate sale is legally monitored which ensures utmost ownership credibility. The number of frauds and duping activities in the real estate industry has risen significantly. Hence, investors must be careful of what and where they are investing. With probate properties, there’s nothing much to worry about. Knowing the probate sales process well is sufficient to help you make valuable investments.
