The probate process is a legal means through which the probate court determines the validity of the will and last testament of the testator. If the probate court finds irregularities such as capacity issues in the will, it will declare the will invalid.
Also the probate process is used by the court to determine what happens to the estate of a deceased person who died intestate. This means that if a person dies without having a will, the court will use to process of probate to determine what happens to the person’s estate. The courts appoint an executor and decide how the estate will be distributed among the legal heirs of the estate. This is all based on the law of the state.
What are probate properties?
Whether a person dies having a will or not, his properties will still pass through the process of probate to enable the passage of ownership rights from the testator to the heirs and beneficiaries of the estate. Probate properties are real properties such as homes or investment properties which are in probate.
Buying a probate property as an investor
As an investor, buying a probate property could really be beneficial to you. Properties which are in the process of probate are usually sold at a discounted price i.e., they are sold at values lesser than the appraised value. The reason for this could be because the executor wants to quickly do away with these assets so he can focus on other things especially if these assets are out of state. These assets are sold under stress as the executor suffers the loss of a loved one and also has to deal with the whole process of managing the estate of the loved one.
If it is the court that is selling the assets, it could be due to the fact that they want to quickly get rid of the asset in order to reduce the time and resources that is being spent.
For these reasons, probate assets are sold at cheaper rates which are beneficial to the buyer or investor.
How to buy a probate property directly
The probate process is public so, the properties which are in probate are listed in public records in the county’s courthouse. To directly buy a probate property, the investor or buying can contact the heirs or executors of the will. This they can do by getting their contact information from the records in the court. There are companies that gather this information on a county-by-county level. This information is sold to buyers in case they do not have the time to go to the court house themselves.
The buyer goes ahead to contact the heirs or executors of the will to strike a bargain. If they reach an agreement then a normal contract will be established outside the court with a titled attorney. Sometimes the probate process has to be completed before the assets can be sold.
Buying a probate property from the court
The court could be responsible for selling probate assets when there is no will and there are no named beneficiaries and heirs. In this case, the court will hire a probate real estate agent who will assist in the sales of the property say a home.
Though many states uses the same process for buying a probate property from the court, the process varies from state to state. The first thing the agent does is to get an appraisal on the property then list it for sale.
This manner of probate sales demands that the investor places at least a 10% deposit when making an offer.
If the offer is accepted the court sends an official notice to the heirs of the estate then a space of 15 days is given, if no response or objection is filed; the court will proceed with either a hearing date to get a petition for approval for the sale amount by the court or approve the amount.
FAQ
Is every home in probate sold at a discount price?
No! Not every home in probate is sold at a discount price. Selling a home at a discount price depends on the state of the property and whether the seller is in a distressed state or not.
Does an attorney have a role to play?
Yes an attorney should be consulted or hired to run the process in order to avoid making errors. To hire our probate attorneys, put a call across to us today.
