Buying Probate Property
Buying Probate Properties in Southern California
Buying a probate property can be a great value, and even profitable in the long-run. Often times they are sold lower than the market price. However, as with all real estate investments there are some risks, which is why you should it’s important to consult with one of the finest probate real estate agents in the greater Los Angeles area. Mike Millea is one of five people with a dual background as a real estate agent and real estate attorney, allowing him to guide his clients through profitable property dealings.
The Process of Buying Probate Property
You can find probate properties by contacting local real estate agents and checking local listings both online and in the newspapers. It’s possible to purchase a probate property on your own if you’re dedicated and extremely well-versed in navigating these complex dealings. However, the easiest way to find probate real estate is to hire an agent, who has experience both purchasing and selling these types of properties. They’ll have extensive resources at hand and the consultative expertise to find homes that will fit your budget and mitigate the risks associated with buying probate property.
There are two ways to purchase probate real estate. The first is to make an offer on the property and the second is to outbid other prospective buyers in probate court. You’ll find more specifics on the two purchase procedures below.
Making an Offer
When a probate property is put on the market, the price of the property is determined by the real estate agent hired by the executor (or heir) of the estate, while an appraiser appointed by the court. This is the price that prospective buyers can make an offer on when trying to purchase the property. It’s very similar to traditional home purchases, except for a few key differences. When an offer is presented to the executor and his team, it can be accepted or countered by another offer. If a buyer’s offer is agreed upon, they must make an additional deposit of 10% of their offer price. However, the sale isn’t completed just yet. The proposed offer is only provisional, until the probate court approves the offer. If the courts decline the buyer’s offer or if another buyer outbids, then this 10% deposit is returned. The original buyer will only lose this deposit if they choose not to continue with the probate purchase process.
Let’s say the buyer’s offer is accepted, and the executor is ready to move forward with the sale. Then, the executor and their attorney apply for a court date, between 30 to 45 days from when the proposed purchase application is submitted. During this time frame, the property is re-listed at the current offer price plus 5% and $500. This allows other interested parties to be notified of the sale, and gives them a chance to outbid the hopeful buyer. If there are no other interested buyers, the sale is finalized and the 10% deposit goes into buyer’s purchase of the property.
In most cases, there will be other interested buyers. When this occurs, the court will perform an auction-style bidding process. The bidding for the property proceeds until the auction concludes with the highest bidder. Then, that individual provides a cashier’s check of at least 10% of the final price to the executor of the estate.
Things to Keep in Mind When Buying Probate Properties
- It’s A Lengthy Process – Purchasing a probate property usually takes at least 6 months or more. If you’re looking to quickly purchase a home, probate property may not be best for you.
- You Might Not Get Your Deposit Back – If you decide that you don’t want to continue with the process after making a bid, your deposit is forfeited. However, if you are outbid or approved for the sale, the 10% deposit will go towards the purchase of the property.
- Probate Properties Are Sold “As Is” – There will be no repairs or warranty for the property. This is why it’s critical to always ask for an inspection of the property if your offer is formally accepted.
- Be Prepared to Overbid – Even if you are the first person to make an offer on the property, you can always be outbid during the auction. You should be prepared have a cashier’s check worth at least 10% of the final asking price.
Contact Mike Millea Probate Real Estate Today!
It’s important to have a strong understanding of what to expect during the probate buying process, and hiring a professional everything is done correctly. If you are interested in learning more about buying or selling probate properties, contact Mike Millea Probate Real Estate’s El Segundo office today at (310) 939-9356. Mike has over 20 years of experience as a both a state attorney and real estate agent, giving him unmatched expertise in navigating the intricacies of probate, trust, and conversations dealings. We look forward to hearing from you soon!