Difference between revisions of "Buy Probate Properties"
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=== Finding Probate Property === | === Finding Probate Property === | ||
#Contact local real estate agents. Probate property sales may be marketed like any other home sales, which means that local [[Find a Good Real Estate Agent|real estate agents]] may have probate listings. The executor of the estate (the person in charge of disbursing a person’s goods after they die), will hire a real estate agency to handle the marketing and sale of the property. | #Contact local real estate agents. Probate property sales may be marketed like any other home sales, which means that local [[Find a Good Real Estate Agent|real estate agents]] may have probate listings. The executor of the estate (the person in charge of disbursing a person’s goods after they die), will hire a real estate agency to handle the marketing and sale of the property. | ||
| − | #*Call local real estate agents and explain that you are interested in purchasing a probate property.<ref>http://www.foxbusiness.com/features/2012/01/30/what-is-probate-sale-and-why-would-want-to-buy-it.html</ref> | + | #*Call local real estate agents and explain that you are interested in purchasing a probate property.<ref name="rf1">http://www.foxbusiness.com/features/2012/01/30/what-is-probate-sale-and-why-would-want-to-buy-it.html</ref> |
#*Ask them whether they handle probate properties. | #*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. | #*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.<ref>http://www.finweb.com/real-estate/guide-to-buying-probate-properties.html#axzz3xpfnwI6D</ref> | + | #*Be very clear with your agent about how much you are willing to spend and the type of property you are interested in purchasing.<ref name="rf2">http://www.finweb.com/real-estate/guide-to-buying-probate-properties.html#axzz3xpfnwI6D</ref> |
#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. | #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. | ||
#*Once you get the list, you can identify all cases that remain open by checking the court’s online docket or by asking the staff person. The staff person can also provide you with information on how to check the [[Access Court Records Electronically|docket electronically]]. | #*Once you get the list, you can identify all cases that remain open by checking the court’s online docket or by asking the staff person. The staff person can also provide you with information on how to check the [[Access Court Records Electronically|docket electronically]]. | ||
#*After identifying open estates, request the inventories for each. When an estate goes through probate, the executor is required to take a complete inventory of the decedent’s property and file that inventory with the court. | #*After identifying open estates, request the inventories for each. When an estate goes through probate, the executor is required to take a complete inventory of the decedent’s property and file that inventory with the court. | ||
#*If you find any estates with property in an area that is desirable to you, contact the attorney for the estate or the executor. Their contact information should be on the case docket sheet maintained by the court. | #*If you find any estates with property in an area that is desirable to you, contact the attorney for the estate or the executor. Their contact information should be on the case docket sheet maintained by the court. | ||
| − | #*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.<ref>http://homeguides.sfgate.com/probate-real-estate-6865.html</ref> | + | #*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.<ref name="rf3">http://homeguides.sfgate.com/probate-real-estate-6865.html</ref> |
#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. | #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.<ref>http://articles.chicagotribune.com/2006-07-07/business/0607070215_1_probate-property-estate-executor-real-estate</ref> | + | #*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.<ref name="rf4">http://articles.chicagotribune.com/2006-07-07/business/0607070215_1_probate-property-estate-executor-real-estate</ref> |
#Review local newspapers. Local newspapers provide a variety of information that can be used to locate probate properties. When reviewing local newspaper, look for the following: | #Review local newspapers. Local newspapers provide a variety of information that can be used to locate probate properties. When reviewing local newspaper, look for the following: | ||
#*Obituary notices; | #*Obituary notices; | ||
#*Published notices to creditors; and | #*Published notices to creditors; and | ||
#*Notices of petition to administer an estate to be probate. | #*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.<ref | + | #*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.<ref name="rf4" /> |
=== Buying Probate Property === | === Buying Probate Property === | ||
| − | #Prepare 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.<ref | + | #Prepare 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.<ref name="rf2" /> |
#Make an offer. You can make an offer on the probate property at any time. However, you should be aware that there are specific requirements for probate properties that are not typically required for regular real estate. | #Make an offer. You can make an offer on the probate property at any time. However, you should be aware that there are specific requirements for probate properties that are not typically required for regular real estate. | ||
#*When you make an offer, you must also give a deposit of 10% of the offer price. | #*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. | #*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.<ref | + | #*Even if your offer is accepted, it is only a provisional acceptance until the probate court confirms the offer.<ref name="rf1" /> |
| − | #*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.<ref>http://www.sanbornteam.com/probate/sell-probate/probate-real-estate-sale-process/</ref> | + | #*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.<ref name="rf5">http://www.sanbornteam.com/probate/sell-probate/probate-real-estate-sale-process/</ref> |
| − | #Ask for an inspection. If your offer is accepted, you should request to have a home inspection. Most often, family members selling a property do not know all of the problems with the property. By having the home inspected, you get a better understanding of the potential problems with the home and whether the value of the home is less than you originally anticipated.<ref | + | #Ask for an inspection. If your offer is accepted, you should request to have a home inspection. Most often, family members selling a property do not know all of the problems with the property. By having the home inspected, you get a better understanding of the potential problems with the home and whether the value of the home is less than you originally anticipated.<ref name="rf1" /> |
#*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. | #*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. | #*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. | ||
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#*The court date is usually between 30 to 45 days from when the application for a date is submitted. | #*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. | #*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.<ref>http://www.foxbusiness.com/features/2012/01/30/what-is-probate-sale-and-why-would-want-to-buy-it.html; http://www.sanbornteam.com/probate/sell-probate/probate-real-estate-sale-process/</ref> | + | #*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.<ref name="rf6">http://www.foxbusiness.com/features/2012/01/30/what-is-probate-sale-and-why-would-want-to-buy-it.html; http://www.sanbornteam.com/probate/sell-probate/probate-real-estate-sale-process/</ref> |
| − | #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.<ref | + | #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.<ref name="rf1" /> |
#Outbid other buyers. If there are other interested parties, the court will begin raising the price of the property at an incremental rate until a final bidder is left. This process is referred to as overbidding. If another buyer outbids your initial bid, you have the right to continue bidding on the property until a final bidder remains by outbidding everyone else. | #Outbid other buyers. If there are other interested parties, the court will begin raising the price of the property at an incremental rate until a final bidder is left. This process is referred to as overbidding. If another buyer outbids your initial bid, you have the right to continue bidding on the property until a final bidder remains by outbidding everyone else. | ||
| − | #*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.<ref>http://www.sanbornteam.com/probate/buy-probate/how-to-buy-probate-real-estate/</ref> | + | #*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.<ref name="rf7">http://www.sanbornteam.com/probate/buy-probate/how-to-buy-probate-real-estate/</ref> |
#*In order for an overbid to be successful, the overbidder must present the court with a cashier’s check made payable to the estate in an amount that is at least 10% of the overbid price. | #*In order for an overbid to be successful, the overbidder must present the court with a cashier’s check made payable to the estate in an amount that is at least 10% of the overbid price. | ||
#*Therefore, those who intend to engage in overbidding must set a top amount that they are willing to pay and have a cashier’s check in that amount prior to attending the court hearing. | #*Therefore, those who intend to engage in overbidding must set a top amount that they are willing to pay and have a cashier’s check in that amount prior to attending the court hearing. | ||
#*If you placed the initial bid on the property and you want to ensure that you are not outbid, you should bring a cashier’s check with you to the court hearing so that you can engage in the bidding process if necessary. | #*If you placed the initial bid on the property and you want to ensure that you are not outbid, you should bring a cashier’s check with you to the court hearing so that you can engage in the bidding process if necessary. | ||
| − | #*If an overbidder 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.<ref | + | #*If an overbidder 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.<ref name="rf7" /> |
#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. | #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 a House|close]] on the real estate transaction, all funds would be transferred to the estate, and the buyer would become the new property owner. | #*The buyer and the estate would[[Close on a House|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.<ref>http://homeguides.sfgate.com/buy-probate-real-estate-7849.html; http://www.sanbornteam.com/probate/sell-probate/probate-real-estate-sale-process/</ref> | + | #*This process may take about 30-45 days from the court hearing.<ref name="rf8">http://homeguides.sfgate.com/buy-probate-real-estate-7849.html; http://www.sanbornteam.com/probate/sell-probate/probate-real-estate-sale-process/</ref> |
== Tips == | == Tips == | ||
