Probate Sale Advice
“Hello Gary. My wife and I see your name everywhere. Question- We’re looking for a home for our daughter. Do you recommend buying a home at a probate sale?”
***ANSWER:
First, some info…
A probate sale occurs when someone passes away without a living trust naming a willing, ready, and able party to handle the estate’s affairs. So the probate court supervises the sale of the real estate.
When that happens, an “executor” (a person named in the decedent’s will or selected by the court to represent the estate) often obtains full “IAEA powers” and handles the sale much like any normal sale.
Without full IAEA powers, the sale is subject to court approval and overbid 30-60 days AFTER the estate and a prospective buyer have signed a tentative purchase contract. The sale may be confirmed by the judge in court without event, or there could be an fast-paced exciting auction and bidding in the courtroom.
If there is an auction, the first overbid must be 5% + $500 more than the original “accepted” offer. Further increments are set at the judge’s discretion.
Many probate properties sell slightly under market due to the 30+ day wait, the 10% non-refundable deposit, and the fact that no contingencies (financing, inspections, etc.) are usually allowed.
Others sell at or even above market value due to the “auction effect”– many people just get excited at an auction and overpay.
So, FINALLY, my answer to your question:
I recommend being open to buying a probate property if you see one, but not investing your time to find one unless you’re very flexible on property characteristics and location, plus ready to invest months looking and going to probate court hearings.
We have a website that specializes in finding distressed real estate. We call it ANDRE.
