Buying probate property: Things to know
Buying real estate is always a risky affair, and when you plan on investing in probates with real estate in Arizona, the risk doubles. While there’s a decent amount of profit to be made on these, the amount of time and effort that goes into it puts even the most seasoned investors away. So, if you’ve heard the term for the first time or are new to investing in real estate, here’s a brief but informative guide on everything pertaining to the basics of a probate sale, and why you should go for it.
What is a probate sale?
What is probate and how does it come about? When a homeowner dies without a will, the estate, including the house and everything left behind by the deceased, enters a legal process, which is known as probate. The entire sale process is overseen by the legal system and the probate court.
Here is a step-by-step process for the sale of probate properties.
- Step #1: The first step in probate sale is when the court asks the real estate agent to list the property. While this is exactly how even normal properties are put up for sale, the differentiating factor is that in the case of probate properties, the court retains control over the sale.
- Step #2: The court sets a listing price in consultation with the estate’s representative and the agent. At this point, clients can make an offer.
- Step #3: While the representative for the estate may be willing to accept the highest bid, the court must decide whether or not to accept it. This is done via a confirmation hearing that usually takes time.
- Step #4: Family members of the deceased are informed and are allowed to comment on the sale of the property, and raise objections if any.
- Step #5: Other investors are allowed to bid for the property at a hearing – offers to exceed the initial/ original offer.
Risks of a probate sale
As we’ve mentioned before, investing in probates with real estate in Arizona can be risky for buyers. Probate sale has tons of rules and regulations, which can be quite overwhelming for those new to real estate. You will not be able to crack the deal if you fail to follow the rules of the probate court. Moreover, you may even lose the down payment. That is not all! Because of the involvement of the court, the probate process stretches for a longer duration, thus leading to potential delay.
Potential benefits of investing in probate properties
In spite of the delay in deals materializing and the involvement of the court, real estate investors and buyers are still attracted to probate properties. Why do you think?
- The price of the probate properties generally tends to be lower because probate sales are more complicated.
- In tight real estate markets, probate properties provide more investment opportunities, which you can’t get through the sale of properties via ordinary channels.
Should you really opt for probates with real estate in Arizona?
If you are new to the real estate industry and you’ve just come to realize the benefits of investing in probate properties, it’s important to consider the risks and your knowledge about the process. However, if you’ve made up your mind on it, we’d recommend taking careful precautions and teaming up with a reliable agent or platform to get the best probate leads and complete information on the properties. This would allow you to screen properties well and know where to invest and which properties to avoid. Gone are the days when investors had to visit local courts to find out information about such properties. There are notable platforms online that offer genuine information about probate properties and reduce the hassle of finding such information on one’s own.
By teaming up with an experienced realtor, an attorney, and a home inspector, you can find out more about the property than is mentioned in the listing. This allows you to find out about various undisclosed problems – issues that may directly or indirectly affect your decision.