Everything Real Estate Investors Should Know About Probate Sales

One of main aspects of succeeding as a real estate investor is to find and buy properties at very good discounts. For doing so, real estate investors can either explore short sales, foreclosures and they can also have a look towards probates with real estate california. Probate sales if done well, can actually provide investors with multiple opportunities to make a lot of profits. That being sale, probate sales can actually be very complex and they are actually a lot more complicated than normal real estate transactions. Most people who intend to enter the probate real estate market are often confused about their approach and hence this piece has been put together to shed more light on probates with real estate california market so that our readers have a good idea of all the things central to probate processes and are able to make an informed decision for themselves.

What exactly are probate sales?

Probate sales actually means the sale of properties when the owner of such properties die without leaving a will. The process is administered by a probate court and the court ensures that the property eventually gets sold at the best possible price.

So how exactly do probate sales work?

The laws and processes surrounding probate actually vary from one state to another. But still, regardless of the location, certain procedures need to be followed to ensure that the property eventually gets sold at the best possible price. If you intend to enter the probates with real estate california market and potentially buy probate real estate, then you must read on further to understand in detail how probate sales actually operate. Let’s have a look at the general probate process.

• THE EXECUTOR GETS APPOINTED:- When a person passes away without ‘willing’ their left behind property to the ‘heirs’ or ‘inheritors’ then said property gets relinquished to the county court. Then it becomes the duty of the county court to appoint executors that can carry out the sale of the property. The ‘executor’ in question is usually the closing living relative of the person who has unfortunately passed away.

• A PROBATE REAL ESTATE AGENT IS HIRED:- Once he or she is appointed, it becomes the duty of the executor to hire probate real estate agents to help them in selling properties.

• PROPERTY APPRAISAL:- Further it becomes the duty of the executor to appoint an appraiser for estimating the value of the property. The list price of the probate property is determined through the appraisal and the probate real estate agent is in charge of presiding over this.

• THE PROPERTY GETS LISTED:- After the list price has been determined, it becomes the duty of the probate real estate agent to market said property like any other property for the purpose of attracting buyers and for eventually drawing a very good offer.

• OFFERS START COMING IN FROM INTERESTED INVESTORS:- When the property gets listed it naturally attracts a lot of eyeballs and then buyers interested in such properties make offers. It can vary from state to state but it is the norm in most states that the offers from such interested investors must be accompanied by at least a 10% down payment and this can be paid by using a cashier’s check. The ‘seller’ in this question has the right to accept the offer, reject the offer and they can even counter the offer, to get a better deal for themselves.

• One thing to be noted here is that even if the executor accepts the highest bid the sale is still not deemed official and this is because the offer is subjected to confirmation from the probate court. The offer eventually passes to the probate court who takes the final call on whether to accept the offer or to reject it and this happens during a confirmation hearing. This ‘confirmation hearing’ can actually take anywhere between 30 to 45 days and during the time the executor has all the right to market the property at new accepted prices and they can continue to receive new offers with an eye towards getting much higher bids for the house in question.

• COURT CONFIRMATION:- On the date of the court hearing, it is a must for all the interested buyers to attend the court hearing in order to confirm the sale. The property probate eventually gets sold in an auction format. The bidder who has won in the auction is required by law to hand over a cashier’s check to validate their bid and this amount should be at least 10% of the overbid price. If in case, the winning bidder isn’t able to hand over such a check then the property in question gets sold to the runner-up. But if in case, no other bidders are around to outbid the initial bid then the court has all the right to confirm the offer for the first buyer and it eventually gets the same.

• THE CONTRACT GETS SIGNED:- After the confirmation of the buyer, it is duty of the executor as well as of the buyer to sign a formal contract. One thing to be noted here is that this contract doesn’t include any contingencies at all.

• INSPECTION OF THE PROPERTY:- The buyer has all the right to request for inspection of the property in question but there’s one catch. The buyer doesn’t have the right to back out of purchasing the property if they eventually find that the property in question has some issues. If the winning bidder doesn’t intend to go further with the purchase, then they will end up losing their deposit, which is 10% of the overbid price.

• CLOSING THE SALE:- Once the contract has been officially signed then a few days after it, the buyer will go on to close on the house.

THE BOTTOM LINE

There you have it, that was everything real estate investors needed to know about probate sales. One thing all real estate investors who intend to join the probate market should know that they will need to be very patient if indeed they intend to be successful in their endeavors. This is mainly because probate processes can actually prove to be very time-consuming as they involve loads of paperwork. Several steps are involved and real estate investors just can’t bypass such steps because all of these steps happen to be very important to the overall probate process. Even if all things go well, there’s always the risk of the probate court’s supervision slowing down things. Real estate investors must know that it can take anywhere between 9 months to even 2-3 years for some probate sales to get completed. The ‘longevity’ of the probate processes will depend on factors like the location of the executor, the number of beneficiaries that are involvers, if they beneficiaries are on good terms with each other or not, etc. Most probate processes get stalled indefinitely if and when the beneficiaries cause some hurdles and bring in some complications.