While you are on the look for a property, you must have run into the term Probate sale. However, how much you know about the same can be a topic of discussion. You can either be equipped with the relevant knowledge about the same or might find it to be an alien term.
However, in both cases, getting to know all about this term and the opportunities that it can provide for real estate investors or independent buyers. A probate sale generally happens when a property owner dies without leaving behind a will or leaves behind a huge amount of debt that can be cleared only with the sale of the property.
The probate laws and procedures, however, vary from state to state and there is no uniformity in this matter. The whole process and the concept of probate can be confusing and tricky, so in this post, we will try to understand the concept of probate sale better. Let’s try to demystify the common questions regarding probate.
What Is A Probate Sale?
“Probate” refers to the legal process through which the court determines that weather a will is valid and how to distribute the will among the family members. A will is a document that recognizes what happens to your property after you die. When there is no valid will, it is the responsibility of the probate court to decide what happens with the property and how it must be distributed among the kin.
A probate court takes up the responsibility to distribute the property by giving the outstanding creditors if any, priority and arranging the sale of the property. As per the probate rules, the credits are cleared and the claimants get the opportunity to collect any debts before the ownership is transferred to the new owners.
A probate process is applicable for anyone who dies without a will and leaves behind a substantial amount of property. An actual situation of probate sale arises when the owner dies leaving behind a significant amount of debt. The probate court takes up the responsibility of selling the property and paying off the debts and then dividing the remaining value among the beneficiaries.
The process of probate sale involves an attorney appointed by the court who is entitled to take care of the process. Right from listing the property to accepting the proposals, the attorney not only keeps tabs on the process but also keeps the court updated.
Although, the attorney has the right to accept proposals and upload the property with a probate Listsource, but nothing can be finalised without the court’s order. The Probate court overlooks the whole procedure and decides on the proposals received.
The court approves the best deal that can pay off the creditors and also benefit the dependents. However, because of the legal angle, the whole process is a lengthy and complicated one.
What Is The Process Of A Probate Sale?
The probate sale process follows an order which is somewhat like a chronological timeline.
The probate court appoints an executor or attorney, who takes up the responsibility of the sale.
The attorney needs to conduct an appraisal of the property and decide on a price, which will be further approved by the court.
With the price being already determined, the property is all set for listing.
Potential buyers can pitch for the property with a 10% downpayment. This downpayment amount will be refunded when the buyer fails to win the bid.
The probate court accesses all the offers to decide on the final buyer. However, during this stage, the family members of the deceased are given a chance to comment on the terms of the sale. When the offer is finally accepted, the buyer is provided with a grace period of 30 to 45 days to finally close the deal.
This period is extremely important as the buyers can pose higher prices for the property and the attorney and the court accepts the best available deal for the property. It is thus recommended that all interested buyers must visit the court on the confirmation day as the property is sold in the auction format with the highest bid getting the property.
It is during this phase that potential buyers can inspect the property to have an idea of the situation and the possible repair required for it. You must also be aware that a probate property is sold as it is and as a buyer, you cannot back out of the deal citing inspection-related reasons.
The Benefits Of Buying A Probate Property
The main benefit of buying a probate property is that you can get it at a lower price than the probable value. Moreover, since the property can be in a dilapidated state, the value is usually lower than what normal properties range.
This is all you need to know about probate properties and their sale. You can look up these properties in the Listsource of probate courts or auction listings. However, now that you know about the long procedures and the legal angle of the sale, you must be well aware that this is a profitable but time-consuming procedure. Measure your capacities and opportunities before stepping into investing in probate property.