If you are new to the real estate business, you may have come across the term “probate sale” and must have been confused. Well, it is quite a popular term in the real estate industry and it comes with great opportunities for investors.
However, standing in 2022 and planning to become a full-time real estate investor, you must be equipped with these terms and have a clear idea of the same. Real Estate investment has been a profitable industry for the last few decades. However, apart from investing in upcoming real-estate projects, there are many other profitable opportunities.
Investing in foreclosure properties, finding opportunities in Probate Sale, engaging in flipping houses, etc. can be some of the noteworthy options. However, in this post, we would try to explore the opportunities offered by probate properties and how they can be profitable investments.
Probate Sale! What is it about?
In a probable sale, the sale of property happens when the original owner passes away without a will or identifying the heirs of the property. In such scenarios, the state takes over the property possession and through the interference of a probate court, the matter is settled.
The probate court will oversee the entire process of selling the house and distributing the proceeds among the legal beneficiaries.
In some cases, a probate sale also takes place when the homeowner dies without paying off a significant amount of debt. The probate court takes the charge, sells the property to pay off the debt and the additional amount is distributed among the legal beneficiaries.
Probate sale: The Process
The accurate process of a probate sale can vary from state to state, however, here we will look into the standard procedure of the sale. Certain laws define the entire possession of probate sale and are responsible for making the process lengthy.
A typical probate sale procedure can take anywhere between 18 to 36 months for the entire process to be over. Here we will try to focus on the three important steps of a Probate Sale process.
- Before the sale procedure begins, an executor is hired to make sure that the process is completed smoothly. The official executor can be someone who is either a relative of the deceased or a trusted individual. The executor will represent the deceased and overlook the entire sales process. However, an executor needs to get court approval and will be under a legal obligation to notify the updates of the procedure to all creditors, beneficiaries, and heirs.
The executor needs to undertake the responsibility to get an appraisal for the said property to get the exact value of the same. The appraisal plays a decisive role in the selling price of the property. If a real estate agent is the appraiser, it is their responsibility to pose the property as any other real estate property for sale.
- For a probate sale to take place successfully, a buyer must offer 10% of the property price as an initial deposit. When the seller accepts the offer, the price and the offer details are passed on to the court for approval. Once the judge of the court accepts the offer and considers the selling price as an appropriate one, there will be a petition in the court.
A court date is fixed for the final sale date and during this waiting period the seller can come up with additional offers. And during the final court date, the one with the highest deal price is awarded the sale.
- Once the deal is closed, the buyer needs to deposit a cashier’s check for the amount decided in court. The executor and the buyer sign a contract and the official sale date is finalized after 15 days of the court sale.
With everything in place, the executor needs to make sure that the seller pays back all the outstanding paychecks, bills, debts, etc. After taking care of all the pending payments, the remaining amount can be distributed to the legal heirs of the deceased.
Opportunities with a Probate Sale property:
The best part of investing in a probate sale property is that you can opt for Flipping Houses In California. Investing in a probate property, you get better pricing and save thousands of dollars.
After purchasing the property at a discounted price you can opt for a profitable resale. You can either take care of the required renovations and then list the property for sale. Reselling is a great investment opportunity as it can bring profitable returns in the long run.
Flipping Houses In California is a great opportunity that poses a higher chance of profits. You can invest some more in the property by making the necessary repairs and then sell it for a higher price.
Needless to say, probate sales can bring greater opportunities for real estate investors. If you are a real estate investor you can consider investing in probate properties for higher returns. You can look at the property listings of a probate court to come across properties that are available for a probate sale.
Give yourself the time to have an idea of the property and its neighborhood before deciding on posing an investment for the same. All the best for this new endeavor.