Making The Deal Count

Three Things You Should Know About Buying A Home At A Probate Sale

16 January 2017

Trix Van Zee

Like foreclosed homes, houses sold during probate sales are typically priced lower than market value so they will move faster. Therefore, if you want to purchase a home but don't have a lot of money, buying a house from a probate sale can net you a great deal on a piece of property that may otherwise be out of reach. However, the process is not like the traditional home buying procedure, and here are three things you should know to help you prepare for the complexities associated with probate houses.

The House is Sold As Is

One important thing you need to know about probate homes is they are sold as is. These homes end up on the auction block because the people who owned them died without a will or didn't account for the property in their estate planning. As a result, the court orders the home sold and the proceeds distributed to the decedent's beneficiaries.

Because of this, the people who are in possession of the home aren't typically motivated to make any repairs or renovations to the house. You'll essentially get the home in the same condition they received it. Therefore, you probably shouldn't pursue a probate home unless you have the cash and/or willingness to fix it up.

If you do choose to buy the house, you should have it thoroughly inspected by a professional so you know exactly what you're getting.

It Takes Longer to Close

Because of the court's involvement with the sale of the home, it will take much longer than normal to close on the house. This is because the court must approve the sale before your offer can be formally accepted, and it can take a long time for your court date to come around. For instance, the confirmation hearing may take place 20 to 40 days after you submit your offer in California. Some states require buyers to wait up to 45 days or more before they can close on the home, so you may not be able to move into the house until several months after submitting your offer.

A coinciding issue is the home stays on the market during this time, and the real estate agent will continue actively courting buyers in an effort to get the best offer. At the confirmation hearing, the court provides an opportunity for other buyers to bid on the home, so there's a very real possibility your dream home may be snatched out of your grasp if you're not able to top an offer made by another buyer.

It's a good idea to keep tabs on the home while waiting for the confirmation hearing and see if other buyers have expressed interest in purchasing the house. If there are, you need to decide if you want to continue with the sale and take the chance you may be outbid or move onto something else.

You Need More Money

A third thing you need to know is that you'll be expected to put up a 10 percent deposit on the home when you submit your offer. So if you're offering a $100,000 for the probate house, you'll need to submit a $10,000 deposit to claim it. This is separate from the down payment you must pay towards the mortgage.

However, the deposit will usually be rolled into the down payment if your offer is accepted by the court. If the court rejects your offer or you're outbid by another buyer, you will get that money back. You may lose that money, though, if you fail to follow through on the sale after the confirmation hearing.

For more information about buying a probate house or help with securing a home this way, contact a real estate attorney at a firm like Leon J Teichner & Associates, P.C.

Share

Search