How to buy probate properties (1)

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How to Buy Probate Properties

• Probate properties are owned by the estate of a
  deceased homeowner and are often sold below
  market value to property investors and potential
  homebuyers.

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Finding Probate Property
Contact Local Real Estate Agents
Call local real estate agents and explain that
you are interested in purchasing a probate
property Ask them whether they handle probate
properties. A good real estate agent will know
when probate properties are coming available and
be able to guide you through the probate
process. Be very clear with your agent about how
much you are willing to spend and the type of
property you are interested in purchasing.
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Contact Your Local Probate Court
A more direct way to identify probate properties
is to go directly to probate court and speak with
the court clerk. If there is not a specific clerk
assigned to the probate court, ask to speak with
a staff person who handles probate cases. You
should request a list of individual probate cases
filed within the previous six months.
You should contact each representative directly
and request information as to the status of the
property, how they are handling the sale, and
whether an asking price has been established. If
the executor is very motivated to sell, they may
negotiate with you directly if the court has
already approved the asking price.
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Buy Property At A Public Auction.
Certain properties are more typically sold at
auction, such as farms. Public auctions are
advertised and a number of buyers may show up to
bid on one or more properties. If you are
interested in probate properties because they can
sometimes be acquired at a lower cost, you should
be wary of purchasing at an auction. Properties
sold at auction generally sell at or above fair
market value for the property.
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Review Local Newspapers

• When reviewing local newspaper, look for the
  following

Obituary notice Published notices to
creditors Notices of petition to administer an
estate to be probate. All of these documents
direct you to current estates in probate that may
include real estate. As discussed above, you can
follow-up on any of the notices in the local
paper at probate court and request an inventory
of the estate.
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Buying Probate PropertyPrepare For A Lengthy
Sales Process
After identifying a probate property in which you
are interested, you should be prepared for a
potentially long process. Generally, purchasing
a probate property takes at least six months and
could take much longer. If you have a hard
timeline for moving into a property, it may be
better not to purchase a probate property.
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Make An Offer
When you make an offer, you must also give a
deposit of 10 of the offer price. The
representative of the estate may accept or give a
counter offer. Even if your offer is accepted,
it is only a provisional acceptance until the
probate court confirms the offer. If you are
overbid or the court does not confirm you as the
buyer, you should be able to get your 10 deposit
refunded to you. If you choose not to move
forward with the purchase on your own, you will
lose your 10 deposit. If you are approved as the
buyer, your deposit will go towards the purchase
of the property.
8
Ask For An Inspection
It is important to note that some sellers may
refuse an inspection and that probate property
sales are as is. This means that you are
purchasing the home in its current condition
without any warranties from the seller. If the
inspection uncovers that the home is in utter
disrepair and needs a significant investment to
make the home livable, you will have to decide
what is in your best interest. Remember, if you
withdraw your offer you will lose your deposit.
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Finalizing The Purchase Of Probate Property In
Court
Move Forward After The Offer Is Accepted
The court date is usually between 30 to 45 days
from when the application for a date is
submitted. The court requires that the estate
advertise the property with the new accepted
price. Some states, such as California, require
that the new probate price be marketed to the
public as 5 higher than the offer plus
500. Even after the court date is set, real
estate agents can continue to show the property
with the hope of getting a higher bid for the
property.
10
Attend Court Hearing

• In order for the sale to be confirmed, you
  must attend a court hearing, along with any other
  buyers interested in the property.
• The court will identify the property you
  made an offer on and then conduct an auction
  style bidding process. If there are no other
  bidders, then the court will most likely confirm
  your offer.

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Outbid Other Buyers
The court may choose to raise the price of the
house by increments of 5,000 or adopt a more
complicated formula. For example, some courts may
set the minimum overbid as the accepted offer
plus 10 of the first 10,000 plus 5 of the
balance. In order for an overbid to be
successful, the over bidder must present the
court with a cashiers check made payable to the
estate in an amount that is at least 10 of the
overbid price. If an over bidder fails to have
the correct payment, either in form or amount, or
the payment is made out to the wrong party, the
court will not confirm their purchase of the
property
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Finalize the purchase
Once a bidder is confirmed as the purchaser, they
have to demonstrate that they have the financing
to move forward with the purchase of the
property. The buyer would then sign a contract
with the estate court. The buyer and the estate
would close on the real estate transaction, all
funds would be transferred to the estate, and the
buyer would become the new property owner. This
process may take about 30-45 days from the court
hearing.
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