Real Estate Tips: How to Buy Probate Properties

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1.13.2015
WikiHow

Probate properties are owned by the estate of a deceased homeowner and are often sold below market value to property investors and potential homebuyers. However, the process of purchasing these properties isn’t always quick — lasting anywhere from 6 months to several years. This article identifies the avenues used to buy probate properties and specific laws that may apply to a probate property sale in some states.

Method 1 of 2: Methods of Buying Probate Properties

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    Purchase probate properties directly from the executor or administrator of the estate. The sale price is often discounted to achieve a quick sale when the estate has outstanding debt.

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    Contact the heirs once they receive the property title to buy probate properties. Many heirs don’t wish to keep the inherited property and will negotiate for a quick cash sale.

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    Buy probate properties at a public sale. Whenever a deceased property owner doesn’t leave a will, the sale goes public. The probate court may order these sales and local rules and regulations vary.

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    Attend probate property auctions. This isn’t always the best route if you’re looking for a bargain, because bidding often increases the sale price. If there are many attendees, the sale price could even exceed market value.

Method 2 of 2: State Laws Governing Probate Property Sales

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    Submit an offer for the probate property. You should view the property prior to making this purchase offer and include any contingencies for the sale, such asfinancing options or requested inspections or repairs.

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    File a petition for a probate court hearing, which is usually set approximately 20-40 days following the petition, depending on the state and how busy the court schedule is.

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    Deposit 10 percent of the total offered purchase price as a down payment for the property.

    • If a buyer defaults on the sale after the court confirms the sale, the buyer could lose this deposit.
    • If the buyer is outbid at the court hearing, the buyer’s deposit is refunded.
    • If the original sale goes through at court, the buyer applies the deposit to the total price owed on the property.
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    Wait for the required advertisement of the sale and accepted purchase price to run in the local newspaper for a pre-determined amount of time, which may vary from state to state.

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    Go to the court hearing to see if there are any counter offers, referred to as overbids, on the property. Anyone making an overbid must match the original offer made and increase that offer by 5 percent plus $500.

    • Any bids made in court can’t include any contingencies.
    • The buyer with the final, highest bid in court gets the property and must immediately submit a cashier’s check for 10 percent of the purchase price, unless it’s the original bidder who’s already submitted a deposit.

 

Tips

  • You can find probate properties by browsing through the daily obituaries, legal creditor notices or petition to administer estate notices in the local newspaper. You can also check public files at your local probate court to find probated properties and ask the executor(s) or administrator(s) of the estate if they will be selling the property.
  • You will be more likely to buy probate properties below market pricing if the heirs want a quick sale or the property is in poor condition.

 

Sources and Citations

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2 Comments on "Real Estate Tips: How to Buy Probate Properties"

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TBradford
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great information on probate properties. I didn’t have a clue.

Elizabeth A Redd
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Thanks for sharing this very valuable information.

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