A probate sale takes place when the executor of the estate of a deceased person puts up the estate's property for sale. Buying such as property has several benefits; for example, the property may be offered at a relatively low price because the executor wants the process over as soon as possible. However, you should also be aware of these complications before bidding for a property in a probate sale:
The Property Is Likely To Be Sold On an "As-Is" Basis
The parties handling a probate sale (such as estate representatives or probate lawyer) usually want the deal done as fast as possible. This means they don't want to improve the curb appeal, upgrade the heating system or make any repair that may prolong the process. This is why most houses sold on probate sales are offered on as-is bases.
To buy such a house, get a home inspector to evaluate the house and tell you its condition. It is then up to you to decide whether you can buy the house with its defects (in case the inspection does reveal defects).
You Will Have To Make A Deposit With The Offer
Another thing is that the estate, through its representatives, may require all potential buyers to accompany their offers with a suitable deposit. For example, if you are making a $250,000 offer, you may be required to make a $25,000 (10% of the offer) with it to show that you are serious. This deposit is different from the usual down payment required while buying a real estate property. This means you must be ready with that cash while submitting your bid. In some cases, the deposit may be folded into the down payment if your bid is accepted.
The Court Has to Approve the Sale
The third thing to note is that the purchase is not just between you and the estate's representative; the court also has a role to play. Once you submit a bid, the representative will present it to the court for analysis and approval. Unfortunately, matters to do with the court don't always run as fast as most people would like, which means the process may be lengthier than normal and your deposit will be sitting in another party's account doing nothing.
Other Bidders Can Step in During the Court Process
Lastly, other potential buyers will be allowed to submit their bids for consideration even while the court is deliberating on your submission. This means that you are not sure of getting the house even after submitting a reasonable bid that the estate's representatives have accepted and you are just waiting for the court's approval. Another person can just come with a higher bid and upset your ambitions at the last minute.
Share27 October 2017
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