Everyone loves a good deal and buying a home in succession can be a fantastic opportunity to own a property at a lower cost to own. Buying a probate property means that the property was once owned by a now deceased person.

There are two ways that a property can be passed to a sequence:

  1. The heirs of the deceased inherit the property. Often times, heirs want to sell a property quickly so that they are not responsible for the insurance, taxes, maintenance, and other associated costs of home ownership.
  2. There is no will or heir. In this case, it is the responsibility of the state to sell the property, and this often means that the property will sell for below true market value.

Real estate listings do not actually indicate that a home is in the process of legalization. Real estate experts will keep a pulse on the local probate market and keep an eye on the obituaries to see if potential probate properties are available. Many real estate investors use estate sales as a primary means of purchasing investment property.

Often times, a real estate representative or probate attorney will hire a real estate agent to market the property just as they would a traditional real estate listing. When an offer is made, the estate representative can accept, counter, or reject the offer. There are specific rules to follow and each state is different. So having a knowledgeable person on your team who knows your state’s procedures is key.

Things to think about regarding succession real estate:

  • Buying probate property can take longer, as there may be a probate court process that can take several months.
  • Cash talks. If you can make a cash offer, that can speed up the probate process.
  • Learn all you can about the property. Because a property is being sold as is, be sure to have the property thoroughly inspected before you commit to buying it. Also, if any debt is attached to the property, you could be liable for it without even knowing it existed. Do your homework!
  • Learn the terms and conditions of a probate sale. In general, contingencies are not accepted.
  • Work with a real estate professional who knows the ins and outs of a probate sale.
  • Be prepared to go to court. While in some cases you can bid on the property and it is accepted, while another scenario may involve appearing in court (in some states) to outbid someone else’s offer. When this happens, you must be prepared with money in hand to complete the transaction.
  • Many probate properties require “TLC.” Often times, elderly homeowners are unable to make necessary home improvements due to a tight budget, physical condition, or they cannot recognize that the property is in need of repair. Make sure you recognize the problems (and costs) that could arise from neglected home improvement projects.

While buying property in probate can be a financially smart move, it can also be overwhelming with all the details and court-regulated steps involved. Keep in mind that probate laws vary from state to state. It is always a good idea to consult a knowledgeable real estate professional who is well versed in the ins and outs of probate sales.

There are pros and cons that go along with purchasing a probate property. In some cases, you can find estate sales that are great bargains. On the other hand, some may be overpriced due to greedy heirs. Whatever the case, make sure you are familiar with the practice of real estate succession in your state and have a knowledgeable real estate professional on your side to help guide you through the process.

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