03/10/2015 by eileenlanza 0 Comments
Why you Shouldn’t Be Afraid of Probate Real Estate
Since I bought my house in PROBATE court, I thought I would share what I know about this topic. Sometimes when buyers see the word ‘probate’ on a listing, they skip over the house. In fact, most Realtors do, too, as they have no idea how to go about a probate sale. I have had many Realtor friends come to me for advice whether they were representing the buyer or the seller.
The process of selling real estate through probate or trust is a court-regulated series of steps that must be carefully monitored.
The sale generally involves the Executor or Administrator of the estate, the attorney representing the estate, a real estate agent representing the seller (the estate), one or more buyers who place bids with the court and those buyers’ agents. Each of these individuals must follow the guidelines and deadlines of the court.
Only about 10% of the probates will require court confirmation. The other 90% is not that far off from a standard sale with less property disclosures.
In my case, we made an offer on our duplex that was accepted by the heirs. The listing agent and attorney publish the sale for several weeks and we get a court date. We had our financing in place (loan) and did all our inspections. We showed up to court (about 6 weeks later) and 3 couples bid against us (all bringing cashier’s checks), driving the price up 10%, but still within our budget. After an exciting 2 minutes, the judge dropped his gavel and we were the successful bidders and won the house! We closed 2 weeks later and truly consider it the best decision we have ever made. We love our neighborhood and appreciate the income from our rental, which actually pays the mortgage! More on why I love income property in a future post…
For a boring, more detailed explanation of this process, please visit my probate real estate page
EXAMPLE: A property is listed at $200,000. The accepted offer is $175,000. The minimum overbid is calculated as follows:
.10 x $10,000 $1,000
+ .05 x $165,000 $8,250 $9,250
+ Accepted offer $175,000
Minimum overbid $184,250
Cashier’s check for 10% $18,425
Judge sets increments for overbid at court
Buyers wishing to overbid must bring cashiers checks.