Buying and selling real estate through the probate process is stressful. The average person simply does not deal with complex legal proceedings very often which creates a steep learning curve. Probate as a definition is the legal process in which an estate transfers to a beneficiary (or group of beneficiaries) after a death of a property holder. If you’ve ever been in a probate situation, you know how stressful it can be. This article is not meant to be an exhaustive guide to buying and selling real estate during probate, but rather a general overview and certainly not a substitute for qualified legal advice.
The Process of probate
If you are looking to sell probate real estate as a beneficiary, as an agent, or buy real estate through a probate estate this article will outline the process for doing so quickly, efficiently, and safely.
The following is the process beneficiaries need to follow when selling real estate during probate:
- Appoint an administrator, executor, or trustee of the estate. This is the person in charge of listing the property on behalf of the decedent either on behalf of themselves or for a beneficiary. If an administrator is not stated in the will, or is unable to perform, someone is appointed by the court. Once an administrator is appointed they will be authorized by the court and receive the “Letters Testamentary” and proceed with the process of selling the property.
- Obtain a petition from court. This is a request to sell a probate estate in the county you are in. Once you have an approval you may proceed toward the selling process.
- Get an appraiser. Using an appraiser before selling the property is essential in order for the court to allow the transfer as quickly as possible. Either before or immediately following the estate appraisal, the heirs should empty the house of belongings to proceed with the listing. Remember the property MUST sell at 90% appraised value to avoid IRS complications
- Sell with the help of an agent or broker. At the same time mail a notice to creditors and pay debts for the decedent.
- Accept an offer and application on the probated listing. This will always either be denied or approved by the court.
- Attend a court confirmation hearing once a purchase application has been filed. All while continuing to sell the property under the agent in hopes of an over bidder. If an over bid has applied, both should appear in the court confirmation hearing. Highest bid ‘winning’ the estate.
- Settle closing costs and distribute proceeds to beneficiaries.
- Close the contract.
It is very important to keep in mind there are a few other steps in this process that an attorney and qualified real estate professional can easily help you navigate. Gene Mock, Associate Broker, Premier Team,
Selling as a beneficiary, administer, executor, trustee or heir
Again, the most mistake-free way to tackle real estate during probate is undoubtedly getting an agent, lawyer, or both! Choosing tenured probate professionals that have been through the process hundreds of times will allow you to sit back and relax. Hiring professionals to guide you during the probate process may seem expensive and unnecessary. But, probate is a long-term legal process with many unforeseen pitfalls including:
- Strict documentation
- Due dates established by the court
- IRS valuation standards
- Monitoring of assets
Working with tenured professionals ensures the safest and quickest transfer of property through the court system.
Buying real estate during probate
If you are interested in buying property from an estate under probate here are some best practices:
- Homes in probate need to be sold at 90% appraisal and require 10% of the offer price as deposit.
- Once you have placed an offer the court will need to approve it.
- You, the buyer, need to be present at the court hearing in order for your offer to be represented.
- If you were out-bid, or if you are over-bidding a previous bid, the court will also decide the bid ‘winner’. Normally, this is the highest bidder. If you are really in love with the house in question, this fact encourages buyers to present at or above market beginning bids.
One of the better reasons for buying a probated home is because the family members usually know a lot about the house and are willing to give you details as they relinquish their attachment. If there’s a problem, you will know about it and know how to solve it.
Auctioned homes are also common during probate and may come at a cheaper price. Review newspapers and online sources for these kind of sales. Once you have finalized your purchase, enjoy your new post-probate home. It’s important to have patience when buying probated property. These processes can be lengthy, but knowing the titles are being brought up-to-date and the asset is being closed properly is highly worth the wait.
To conclude, buying and selling probate property can be a hassle but these steps alleviate some of that stress. If you follow these guidelines, you will be on your way to entering the probate process more informed than before.
Contact Gene Mock, Associate Broker, Premier Team, Keller Williams Realty 703-342-8100
for more information about selling your inheritance real estate
Selling Real Estate During Probate Fast