After the death of a person, the property of the deceased must be distributed according to what was mentioned in the will. The legal process to do that is termed ‘probate.’
Probate is the legal process involving the courts, and that makes sure that all the wishes of the deceased person are maintained according to the will. If the deceased owned real estate then it’s a part of the probate but the process is often a bit complicated than other belongings or other assets of the deceased.
If you are in real estate investing, you must know the details of the probate process because that would help you in buying probate properties.
Probate real estateis often a gold mine for investors but you need to know what are the steps involved in the probate process, and how to buy probate properties. So, here we are with a brief blog about probate and how things work in probate.
What is Probate for Real Estate?
How the real estate will be handled in probate will depend on the will left by the deceased. If the will mentions the property to be transferred directly to an heir, it can then simplify the process.
However, if no particular inheritor is named, the process gets a bit complex and how the real estate will be handled will depend on other factors. For instance, the property may be sold to pay off debts. Or, some heir might want to sell the property while others want to keep it.
But the rules for probate are different in different states. While some states allow a quit claim deed, which can ease the process and the heirs receive the property without going through probate, other states do not allow it.
How does the Probate Process Work?
How real estate is to be handled in probate depends on the laws of the particular state. But the overall process goes through the supervision of the court. A person, often a near relative of the deceased is made to be the executor who oversees the entire process and must follow the provisions made by the court.
If there is a clash between the heirs and some wish to keep the estate and others want to sell, the court decides what will happen to the property. In most cases, the property is sold and the profits are distributed among the heirs.
How to Find Probate Properties?
If you are a real estate investor and looking for probate properties, you can check the county records which are public records that anyone has access to. You can even find some properties listed online while for others you need to visit the courthouse.
The records will give you details of the probate property, such as the address, the name of the deceased, and the heirs. The records will also show the name of the representative.
There are also some agencies that sell probate lead lists and you can get information about probate properties from there as well.
Why Buy Probate Properties?
The biggest benefit of buying a probate property is that you can buy it at a much lesser amount than the market price. You can then renovate and sell it. You can also rent it.
Whether there are heirs or not, probate properties tend to be sold below market price due to a couple of reasons.
First, when there are heirs, they might not have an interest in owning the real estate property and bear the burden of paying the taxes, property insurance, and maintenance fees. So, the heirs generally want the property to be sold fast and get relieved.
Even when there are no heirs, and the state becomes responsible for the sale, and they too want the property off the books as fast as possible.
Thus, in both cases, you, as a real estate investor, can be the gainer as you can get hold of the property at a much lesser amount than the market value.
Thus, probate real estate can be a great investment opportunity and you can gain huge profits if you invest in these properties correctly.