Buying a property in probate can help you get a great deal that you wouldn’t find on the regular market. However, to take advantage of this opportunity, you must be prepared to wait, wait some more, and be prepared for the unexpected at any moment. There are several ways in which the process of buying probate property is different from a standard purchase.
Note that the process depends largely on how much authority the executor or personal representative has. If the executor/personal representative has full authority, they may sell the home without the court’s intervention as long as no heirs or beneficiaries object. If the personal representative has limited authority or someone objects to the sale, the home sale must go through the following process.
Getting an Accepted Offer
It all begins when someone makes an initial offer on the home. The representative can accept the offer, but it’s important to note that this does not obligate the estate to actually sell to the person making the initial offer. There are several more steps, and at any point, this initial offer can fall through.
Putting Money Down
If the administrator/executor only has limited authority, then the offer goes to the court after it has been accepted. Before the court hearing, the buyer must make a 10% deposit.
The Probate Property Bidding Process
A notice of the sale is advertised in a local newspaper. The notice includes the date of the court hearing and the initial offered price. This allows other interested buyers to show up at the court hearing to participate in open bidding.
If there are others interested in buying the property, they must begin by overbidding the original offer. The first overbid must be 5% more than the original offer plus an additional $500. The bidding process carries on from there. The final bid must be no less than 90% of the appraised value of the home.
Closing the Probate Property Deal
To make a deal, a buyer has to make an unconditional offer – their bid cannot be contingent on an inspection or obtaining financing. They should also be prepared to make a 10% deposit on the final price. If the final buyer isn’t the person who made the initial offer, the initial deposit is refunded.
This closes the deal and allows the sale of the probate property to move forward. While the waiting period and other steps can cause substantial stress, going through this process can also help buyers find their perfect home at a fair price.
If you’re interested in purchasing a probate property or navigating the probate process, reach out to Werner Law Firm. Our extensive experience in probate court makes us an excellent resource. Call us at 1-800-752-9937 to get started.