Cash Your Check When They Check Out By Buying Probate Properties
If you want to get a great deal on a house, try Buying Probate Properties.
As a house flipper, when you are searching for good properties to purchase, you want to get the best deal for your money. Sometimes, there are ways you can buy these houses well below market value through unconventional means.
For example, if a homeowner is facing foreclosure, you might be able to buy the house through a short sale. If the home has already been foreclosed, you can purchase it in a foreclosure auction. Or, if it doesn’t receive any bids, you can buy it as an REO property. Additionally, you might be able to find a deal if the previous homeowners are going through a divorce.
In all of these cases, the person or organization in possession of the property, whether it is the homeowner or bank, is eager to get it off their hands as quickly as possible before they lose any more money.
However, there is one way you can find and buy a property well below market value that most real estate investors don’t know about: buying probate properties.
What Is A Probate Property?
A probate property is the house of a deceased person. When a person dies, there are two different things that can happen to his or her house:
1. There Is No Will Or Heir
If there are no heirs and the deceased person does not leave a will, the property goes to probate court to be sold. At probate court, the state is in charge of selling the property. They will try to sell the home for as high a price as they can, but still well below market value. This is a great place for house flippers to find a good, cheap piece of real estate.
2. It Is Bequeathed To The Heirs Of The Deceased.
If this happens, you may still be able to purchase the property. Often times, the heirs have their own home and their deceased relative’s property is a burden more than anything else. They will want to sell the property, but not want to hold onto it for a long time because they will loose profit through costs like insurance, taxes and maintenance.
How To Find A Probate Sale
When looking at real estate listings, there is almost always no way to know whether the house is a probate property or not. To find these properties, you will have to do the research yourself.
A common way to find these properties is by simply looking at the obituaries in your local newspaper.
You can then visit the court’s office or records in the area in which the deceased person was residing. There, you can find out if the person owned any property.
Another option is to find the office in your area that handles last will and testaments. Luckily for you, these wills are public documents and anyone can access them. Here you will find any recently deceased persons in your district that had real estate to their name.
If you’re willing to spend some money, there are plenty of private companies that sell information regarding probate property that is available.
If all else fails, you could always resort to using a real estate broker to help you with your search. These brokers are knowledgeable and may be able to aid you with other stages of the process.
Much of the time, the probate court process will last for months. And, if the deceased person does not leave a will, it could last longer, perhaps even for multiple years.
If you are hoping for a quick purchase, this might not be the avenue for you. However, if you have the time to wait, and you have other projects to profit from in the mean time, probates might be worth the wait.
The process can be sped up somewhat if you communicate that you are able to close quickly. Offer a cash purchase and provide a proof of funds to make the yourself appealing to the probate court and the personal representative.
In addition to the length of time it takes, be aware that you will have to pay a 10% deposit when you make an offer.
Make sure you find out if there is any debt attached to the property before you buy. You don’t want to be waiting an entire year for a house that has an existing mortgage that you’ll have to pay off, unless of course you can still profit. The good news is, 67% of home in probate court are completely free of debt.