Probate in real estate has proven to be one of the best acquisition strategies in recent times. Investors can find an attractive deal while trying to acquire houses in probate. Buying homes in probate is a unique process and it can be in your best interest to learn it. You can find your next deal only by understanding the basics of the probate real estate process. Here’s a chance to understand the process and get every possible information from this guide.
What is Probate in Real Estate?
It is the legal process in which property ownership is transferred to someone or sold on the death of the homeowner. In another way, it is described as the procedure in which a decedent’s will is processed in a special court.
In real estate, probate refers to the management of a deceased person’s will. Managing a will also include home, and probate investors in real estate try to get their hands on it.
A common question arises as to why the investors show their interest in probate strays. Because they get great deals. Most often people avoid inheriting a deceased relative’s property as they might not afford the maintenance costs. It is why they look for ways to quickly hand it over to someone. This is when the investors step in the process.
Investors grab this opportunity. The new homeowner finds ways to get rid of the home due to their lack of interest to own it, and probate investors wait to capitalize it.
Steps of Probate Real Estate
This real estate process may create confusion between the court proceedings and legal documents. But, the probate properties generally follow the same process. Here are the steps of probate in real estate so that you can understand the process better.
- Appointment of an Executor: To begin the probate process, the appointment of an Executor of the real estate is important. Usually, the name of the Executor is mentioned in a decedent’s will. However, if not, then the court appoints one to fulfill the role. The will states whether the property is to be inherited by an heir or to be sold.
- Appraisal of the Property: In a case where the property is to be sold, the Executor determines a listing price for the property. An experienced real estate agent provides an appraisal for the probate sale that determines the listing price.
- Listing of the Property: Once the listing price is determined, the property is listed in the market for sale. Like any other property sale, the real estate agent markets it on different websites to attract a higher offer price.
- Offer Approval and sale: On submission of an offer, the real estate agent negotiates the terms for sale to satisfy both the parties (buyers and sellers). Then an official notice is sent to the heirs of the property. They are given a 15 day period to put an objection to the property sale. If no one objects to it, then the court schedules a date on which the sale of the property is executed.
The Time of Probate Process
Studies report that a probate process can take a few months to a year. It involves different assets and property laws. Hence, the overall process can take a couple of years on average.
The common factors that can affect the probate real estate process are the number of heirs, issues with the will execution, and taxes or debts on the property. Also, the state and the local laws in the property area can impact the overall time of the process. It takes a long time due to the involvement of the various court proceedings with the process.
Perhaps probate investors are generally aware of the time, but the presence of a will can speed up the process. A property will state if it has already been assigned to an heir. The decision then lies on the beneficiary how to move forward with the property.