Probate is a legal process that involves settling debts and distributing assets of the decedent (the deceased). In many cases, it involves the sale of real estate properties belonging to the decedent's estate. Such properties are sold on a bidding process, which must be confirmed by the court handling the probate. Here are four essential things to know before bidding on such property:
Many Probate Properties Need Repairs
The first thing you should know is that many of the properties may not be in tiptop conditions. After all, most deaths occur unexpectedly, which means the owner of a probate property wasn't probably planning to sell it soon. It's also possible that the decedent struggled with his or her health issues and didn't have the time or resources to fix the problems. Therefore, expect different shortcomings such as outdated appliances.
The Properties Are Sold On "As-Is Basis"
A probate property is sold with all its shortcomings intact; don't expect the seller to make the necessary repairs. Therefore, factor the cost of the expected improvements when making the purchase offer. Don't be excited at the low price of a property and underestimate the cost of the repairs.
There Aren't Contingencies
Another thing to note is that your purchase of the property cannot hinge on a contingency. This means the purchase agreement won't include a clause making your purchase of the property conditional (for example, on the sale of your house). The seller won't wait for you to find the funds or get a loan approval. You must be ready with the money and pay it when needed. Therefore, if you are dealing with a lender, get pre-approval so that you can close the sale as soon as the seller is ready to transfer the property.
Anybody Can Interrupt Your Transaction
A probate sale takes the form of bidding, but unlike conventional bidding, winning doesn't guarantee you the property. Anybody who comes up with a better offer can hijack the sale and get the property. This may happen even on the last day of the process when all that is remaining is for the court to confirm your offer and give you official custody of the property. You may have to adjust your price to preserve the purchase or forfeit it.
If the probate purchase is such a hustle, then why do people bother with it? The upside of a probate property purchase is that they often turn out to be good bargains because the interested parties are usually working on a deadline. Get a real estate professional with experience in probate sales and you may land a good property at a bargain. Contact a lawyer, such as Maury K Cutler, for more information.