Probate sales are often touted as a good deal, but is it risky to buy this kind of property? Before we get into this, let’s first define what probate is.
In short, probate is the process by which the court determines how to appropriately distribute your assets after death. But, when buying this type of property, it’s important to understand the difference between the two types of probate sale: full-authority probate sales and limited-authority probate sales.
In a full-authority probate sale, the administrator has complete power to sell the property—and, unless court confirmation is required, this type of transaction is generally very straightforward. However, while full-authority probate sales are very similar to standard real estate transactions, a probate purchase agreement does carry some distinct terms and conditions. Per these conditions, the details of your offer will be relayed to the decedent’s beneficiaries via a notice of proposed action. Then, so long as none of the beneficiaries objects, the sale will proceed as normal.
In a limited-authority probate sale, the property’s administrator is required to follow a series of court-mandated steps. The court will also provide guidance on marketing, pricing, negotiation, and other aspects of the process.
The bottom line is that probate properties can be a great opportunity for today’s homebuyers, so long as you understand the process that comes along with such a transaction. And since so many people assume a probate sale is overly complicated, buyers who take advantage of this niche will likely face less competition.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.