A Guide to Buying Probate Properties
As a real estate investor, you will often find your best deals when looking for off-market properties. One great investment idea is to purchase probate properties. You might be able to get a great house at a discounted price when it is sold through probate or by the heir who inherited it.
What is a Probate Property?
Probate properties are houses, investment properties or land holdings that are in the legal process known as “probate.” This is when the estate of the deceased is carried out, whether through a will, a trust or the court system itself. All properties will be sent through a probate court, even if there is a will in place. The house(s) will eventually passed to any named beneficiaries, barring any legal complications or disputes.
The heirs can then decide if they want to sell the property themselves or a court-appointed estate representative will be brought in to sell it. This is where the savvy real estate investor comes in to take advantage of a potentially great investment opportunity!
Buying a Good Property at a Great Price
In many cases, a probate property is considered a “distressed” sale. The property is often a burden (financially and/or emotionally) to the heirs. This is especially true if the beneficiary lives out of state and doesn’t have the time, money or resources to deal with an inherited property in a different area. Another common reason to sell is when there are multiple heirs named in the will and designated to share ownership the property. The easiest solution is to sell the house quickly and split up the proceeds.
Probate properties are usually offered up at a set amount that is typically below the appraised value. The court and/or the heirs just want to get the sale finalized quickly and with as few complications as possible. They also usually don’t have any financial investment in the property, so they are less concerned about getting the maximum selling price. It’s usually more about convenience and expediency than anything else.
How Do I Find Probate Properties for Sale?
There are different methods that real estate investors can use to identify probate properties and get themselves in position to purchase these houses at good prices:
• Contact the county courthouse for probate leads
• Purchase probate leads from the court or probate attorneys
• Build a referral relationship with a probate attorney
• Market to the executor of the will or directly to the heirs
• Join a real estate investment network that has connections to probate leads
How Does the Probate Purchase Process Work?
Once you are in the right position and are able to get your offer accepted on a probate property, the selling process is pretty standard. There may be some additional legal documents if dealing with the probate court, but otherwise it would go through a traditional closing process. How you are paying for the property may determine how long the closing process takes. As always, cash sales will go the fastest while financed deals (like a mortgage loan, for instance) will take longer to finalize the transaction.
The goal of any real estate investor is to get good properties at great prices. Probate properties and inherited properties can be excellent investment opportunities if you know what you are doing.
We deal with many probate properties and other off-market deals at PropertyLark. Consider joining our home buying network for access to our resources and analytics tools that will help you get the most out of your real estate investment portfolio. Fill out our brief buyer questionnaire to see if you qualify.