What is Probate property?
Probate property is an asset which is left by a deceased person and passed through probate court. This includes assets that are either distributed by a will or left by a person who has died intestate, or without a will.
Although the sale of probate property often refers to real estate; jewelry, stocks, cars, and other collectibles can also be a part of it.
When do we have probate property for sale?
The selling of probate assets usually occurs only when it is necessary to pay off debts to creditors or other situations such as eminent domain which requires the probate assets’ sale. The remaining proceeds of the sale would be distributed to the heirs
Who can make the decision of selling Probate Property?
Probate property can be sold by:
– The executor of the estate who is named in the will to manage the business of distributing and wrapping up the estate
– The administrator of the estate, or person appointed by the court to manage the estate when the deceased dies intestate and heirs are seeking to have the estate administered
– The court, in intestate situations where no heirs are seeking administration
– Heirs after they inherit the home through a probate procedure, at which point the home is technically no longer probate property.
How to Buy Probate Property
Real estate sold in a probate sale can be a very good bargain for investors or potential homeowners. Generally, the executor or administrator wants to sell the property as quickly as possible, often below market value. Improvements are usually not made to the property prior to the sale, so this can be a good opportunity to buy a property to either flip it or improve it to live in.
You can buy a probate property via different methods.
- By auction: When a property is sold by the court, it is placed for sale as in an auction. Your local court may list the properties available on its website. It’s also possible to track down properties for sale by researching people listed in obituaries and determining if they left property behind. Depending on the jurisdiction, you must submit a bid or appear at the auction. If you win, you are usually required to pay in cash or check.
- By offer made to the executor: If the executor is selling the property to satisfy creditors, you must send an offer to the executor. The property may or may not be listed for sale with a real estate agent. In many states, the court must approve the purchase offer, which can take several weeks.
- By normal real estate sale (via broker, agent or direct sale): In some situations, the heirs decide to sell the home themselves after the probate process has ended. In such situations, the sale is conducted like a regular real estate transaction in your state.
Procedures for buying and selling probate real estate or other properties may vary in different states. You should ask for professional consultation from property lawyers to enable a smooth and cost-effective transactions.