When it comes to buying or selling probate properties, it helps to know what to expect during the process. Here are the common issues experienced by buyers and sellers of probate properties:
Common buyer experiences
Probate properties, which are often sold below market value, have the potential to become solid real estate investments. Buyers who are new to the probate process may encounter these common issues:
- Properties being sold as-is
If you’re buying a probate property, be prepared to view homes that are sold “as-is.” When a property is sold in this condition, you can expect to see much wear and tear in it.
Given the property’s less-than-desirable condition, you need to look beyond the mess and see if it has the potential to be a great investment. Consider the layout and flow of the home. Is it something you can work with? Or do you need to make a huge renovation to improve it?
And while you do need to look at the bigger picture, it also helps to pay attention to the details. Will it need repairs that could end up costing more than the sale price? Do you see any signs of mildew, mold, or water damage? Observing these factors can help you decide if it’s a probate property worth investing in or not.
- Encountering incomplete or inaccurate disclosures
Buyers often ask sellers to submit disclosure forms for their review. These disclosures, the requirements of which differ from state to state, tell the buyer about any material defects the home may possess. For probate homes, however, sellers aren’t required to issue disclosures in many states since they aren’t the ones who lived in the home. Then again, the probate process in California requires executors and administrators to state what they know about the probate property through an Exempt Seller Disclosure Form.
- No contingencies on probate sales
In a standard home purchase, the contract will have a number of contingencies that must be met before the closing date. But for probate properties, you won’t see any contingencies in the contract. This is so the home can be sold right away and avoid further delays in the probate process. If you do discover a major issue during the home inspection, you can either back out of the contract and lose your deposit or continue with the purchase.
Common seller experiences
Appointed by the court, executors or administrators are in charge of managing the affairs of the deceased individual’s probate estate. Since the role of executor comes with several important duties, it’s essential to be aware of the issues you may face.
- Difficulty in determining what the decedent owns
Executors and administrators must locate and determine what the decedent owned, whether it’s jewelry, artwork, real estate, or long-forgotten bonds. Some assets may even be located in different states and some may be shared with other individuals. Finding these assets and keeping track of them is crucial to the probate process since they must maintain their value until the estate is settled.
- Disagreements among the heirs
Conflict over inheritance is one of the most common issues that executors or administrators have faced in selling a probate property. Disagreements on whether the property should be sold, rented out, or given to a family member are some of the usual scenarios. That’s why it’s important to have a discussion with the heirs or beneficiaries before entering into probate.
- The lengthy probate process
Probate involves a number of important steps, from filing a petition to begin probate to closing the estate. The entire probate process can take around 9 to 12 months, depending on the size of the estate, the will (or lack thereof), the heirs, and your state probate laws. Petitioning for probate alone may take some time since your set court date depends on the court’s availability.
- Delay in managing the estate
As the executor or administrator of the estate, it’s important to start managing the property as soon as possible. Just going through the process itself without any hitches can already take up to a year; even more if there are complications that arise anywhere in this process. Among the crucial steps to take here are filing the petition, taking inventory of the assets, handling all the bills and debts, distributing the remaining assets, and finally, closing the estate.
Navigating the probate real estate process can be confusing without the right Realtor by your side. That’s where I come in. Call me, Nick Caudillo at 626.388.6644 or email nick@91740.info for services and guidance from a top-rated real estate professional serving the Los Angeles, San Bernardino, and Riverside areas.
