Probate property refers to estate assets which are suspended in probate court. When a person dies, their assets are transferred to probate. The estate is administered by the decedent's designated estate executor.
Probate properties consist of real estate held through the Probate Court. When a person dies, their assets are placed into probate unless they have executed a revocable living trust. Probate is the legal process used to ensure the decedent's wishes are carried out according to their Last Will and Testament. If the decedent dies without leaving a Will (intestate) the Probate Court assigns someone to oversee the estate and take charge of probate properties
When heirs are entitled to probate properties, they have the right the sale the property if desired. There are many reasons heirs choose to sell probate real estate. The most common is to reduce the expenses associated with maintaining the property.
Probate properties cannot be sold without authorization from the Probate Court. Unless family disputes arise or unusual circumstances surround probate properties, the probate judge normally approves the sale.
Once probate properties are approved for sale, real estate investors must submit a bid through the court. Multiple investors can submit a bid for probate properties. The highest bidder will be allowed to purchase the real estate after attending a court confirmation hearing. Once the final bid is accepted, escrow generally closes in 30 to 45 days.
Investing in probate properties can substantially increase your real estate investment portfolio. In many instances, probate properties are free of mortgage payments or have considerable equity. Oftentimes heirs want to sell probate properties to reduce their stress of having to maintain the house or land. Most are willing to sell their inherited real estate well under market value. It's not uncommon to purchase probate properties 20- to 40-percent under market value.
Locating probate properties requires a bit of detective work, but doesn't cost a dime. Probate properties can easily be located by paying a visit to your local courthouse. When a person dies, their Last Will and Testament becomes public information. The Estate Administrator is named in the Will, along with their contact information.
In order to purchase probate properties, you will deal directly with the estate administrator. Therefore, you will need to contact them either by phone or mail. For obvious reasons, the utmost respect is required when talking to estate administrators regarding the sale of probate properties. Remember, they have recently lost a loved one and selling their assets is difficult and uncomfortable.
Probate properties can provide a significant return on investment when used for house flipping or rental properties. They can also be a good option for the first-time home buyer or individuals looking for a second home. To better understand the benefits of probate properties for real estate investment purposes, seek out private investors who specialize in this niche market. Probate investors can guide you through the process and help you locate probate properties in a timely fashion.