If a person in California passes away and does not have their home in a trust, their assets must go through a legal process called probate. The heirs may want the house sold to access the proceeds for paying off debts and distributing the remainder. Probate homes may present a unique chance at getting a good deal but have risks.
Probate sale process
Selling a home in probate involves some complexity and can become lengthy. The sale must receive approval from the probate court, and the estate executor must have the property appraised.
The executor must advertise the sale to potential buyers, and the executor must heed relevant local laws and regulations. Due to the complicated nature of the transaction, buyers should work with a real estate agent with expertise or expertise in probate sales.
Benefits of a probate sale for buyers
Homes for sale in probate may come at a lower price because the heirs want to make a quick sale for various reasons. These homes do not get advertised the same way as regular homes for sale, so interested buyers may also have less competition, which can lower the risk of a bidding war and keep the price lower. It also means a buyer might get a great investment home to repair and sell for profit.
The deceased owner’s estate in probate must settle debts before selling the property, which ensures the buyer will get a home with no liens or encumbrances.
Important drawbacks
In a probate sale, the property may be distressed or require significant repair work and will be sold as-is. The discounted price for a probate sale can be offset by the money needed to bring the house back to a livable standard. The process requires court approval and involves several other steps, which take a very long time.
In probate sales, sellers must disclose known issues or defects with the property. Buyers should conduct their due diligence and review all disclosures to ensure they have a clear picture of the property’s condition.
Understanding the risks of buying a house in probate can help you identify a potential bargain during your home search.