Real Estate Investing in California Probate
Real estate investing in California probate properties can be a profitable niche for those who take time to learn how the practice works. Probate real estate refers to property owned by a decedent whose estate is suspended in probate court. Probate is required to settle estate matters and distribute inheritance property.
Although a profitable venture, real estate investing in California probate requires more time than buying other types of investment properties. Investors should have a good understanding of how the probate process works and how to submit offers on probated realty.
Several reasons exist for selling real estate suspended in probate. When a person dies their estate is responsible for paying home loan installments, property taxes, homeowners insurance premiums, homeowner's association dues, and maintenance. If the property does not transfer to a surviving spouse or if the estate cannot afford real estate related expenses, the estate administrator can petition the court to liquidate the asset.
If the property is bequeathed to heirs who do not want it, the heirs can elect to sell it. When multiple heirs are entitled to real estate they must all agree to sell the property. The exception to this rule is if the property creates a financial burden or if the home is at risk for foreclosure.
Estate administrators who reside out of state often elect to sell California probate properties in order to eliminate the responsibility of care. Probate real estate must be maintained throughout the probate process. This includes general maintenance, lawn care and landscaping, and urgent repairs such as replacing appliances, HVAC units, or broken plumbing.
In order to properly care for probated properties, estate administrators often must hire outside services. These costs are paid through the estate and can be quite costly when probate drags on for months or years. Selling the property eliminates the financial burden and provides lump sum cash to heirs.
Estate executors act as fiduciary for the estate and required to make decisions based on what is best for heirs. Estate administrators must adhere to California probate laws to ensure the sale is legal.
There are two processes used to sell California probate realestate. The first is known as Court Confirmation and requires approval from the probate judge. The second process falls under the Independent Administration of Estate's Act (IAEA) and grants estate executors authority to sell probate real estate without court approval.
When probate real estate is sold under IAEA, investors can contact the estate administrator to discuss the sale. When estates require court confirmation, investors must submit offers for probate property through the court and often compete with other buyers.
In order to locate California probate real estate, investors must scour court probate records. Investors can find pertinent information within decedents' last will and testament. Wills are a matter of public record and can be viewed by anyone.
The Will provides contact information for the probate personal representative and real estate holdings. Once the property address is located, investors must review property records to determine if a mortgage note is attached.
Property records provide the name of the lending institution holding loan contracts, as well as property information such as square footage, lot size, property age, appraised value, and if any tax liens or creditor judgments are attached.
Once investors gather information about potential investment properties they will be able to determine if the property will be sold through court confirmation or under IAEA. As with any real estate investment investors must engage in due diligence. It is crucial to obtain accurate market assessments and research the areas where California probate properties are located.
Investors who engage in real estate investing in California probate should work with probate specialists or real estate attorneys until they become proficient in this field. We invite you to learn more about the advantages of buying probate property by browsing our California probate real estate article library. Take a moment to subscribe to our mailing list to receive instant notification when new probate investing articles are published.
Published on September 20, 2010 at 02:18 AM
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