When it comes to real estate investing, there are plenty of ways to make money. One way real estate investors find affordable properties to invest in is through probate real estate. These probate properties are left behind when someone passes away. The properties can either go to someone assigned in a will or are not left to anyone. This doesn’t mean it’s a bad practice, though. Often, the families of the person who passed away are looking to get rid of the house. Probate real estate helps investors get good properties and helps families reduce the burden of taking care of the home. 

What is Probate Real Estate?

Essentially, when a homeowner passes away, their property becomes part of a probate. Probate is the legal process of distributing the deceased’s holdings. Typically, an executor will distribute the property to one or more people based on the deceased’s will. Most people already have a home when they inherit their loved one’s house. The property may be in rough shape and don’t have the funds to fix it up and keep it. There are many reasons why those who inherit the property may be looking to sell. This is where probate real estate comes in. 

The heir or executor of the property often wants to sell it as quickly as possible. This helps them avoid paying taxes and fees on the property. Other sellers may choose to move quickly so they can emotionally move on from the process. If the house is split between multiple people, selling the home fast is the best way to divide assets equally, as they can’t divide a home into pieces. Because they want the house sold quickly, it is often priced to reflect that. Since these properties are sold at a lower price, they will be easier to renovate and sell for a higher profit than standard real estate investments. 

The job of the real estate investor is to work somewhat with the sellers to ensure a good deal for everyone involved. This will be a challenging time for them, and selling their home while in probate can be a huge weight lifted off their shoulders. They have so many other things to worry about, and a property that needs repairs should not be one of them. 

How to Find Probate Real Estate Properties

It can be intimidating at first when getting into probate real estate. You may not know where to start when it comes to finding properties or leads. However, once you get the hang of it, probate real estate investing can be a very easy way to expand your portfolio. 

Estate Auctions

If you have decided that you want to invest in probate real estate, then you need to know how and where to find these properties. Most of them are sold at estate auctions. Auctions held in probate real estate presale are usually more open to negotiation for the right price. These properties may also have various owners.

Probate Websites

Search the internet for property resources in probate real estate presale. Many websites are dedicated to people looking into buying discounted estates or those preparing for probate real estate presale or even for liquidation rights that can be purchased by anyone interested. These sites list properties for sale and allow you to read descriptions of these properties and submit offers on any property that you like.

Realtors

Properties that are not for sale in probate real estate presale can be purchased from other interested parties through private sales held in after-market auctions. With the help of a realtor or professional, you can find out the names and contact information of all the owners of such properties. Many people have found these properties through word of mouth and simply asking around.

County Clerk

Often, your county clerk is your best asset when it comes to finding probate properties. Many county clerks will place a notice in the local newspaper with all real estate properties that are going through the probate process. If there is nothing like that in your local newspaper, try going directly to the source. See if your county clerk has this list available anywhere other than the newspaper that you would be able to access. 

Local Probate Court

Do not buy probate sale leads. You can get them for free from your county’s probate court. Reach out to them. They should be able to provide you with a list of all open probate cases involving real estate. Some counties have these online. Others may require you to visit in person. 

How to Buy Probate Real Estate Properties

The process of buying a property in probate can vary from purchase to purchase. For a private negotiation over the sale of the property, some investors choose to send a letter to the executor of the will or whoever is in charge of the estate. Many investors opt for this approach because it can lead to a quick sale and often a lower price. You may also run into those who need to worry about asset division, in which case, they will want to sell the home quickly to be able to distribute the assets evenly. 

Before jumping into buying your first probate real estate property, you should look into the rules in your county surrounding it. Every county has different rules regarding how you should go about the process. Your best bet for your first purchase would be to hire a probate attorney who has knowledge about your specific county. They will be able to guide you through the process and ensure you don’t take any wrong steps. 

What to Look for in Probate Real Estate Properties

Properties that are sold in after-market auctions must have specific attributes to make them attractive for a possible buyer. Properties sold in probate real estate presale will usually be listed at a fixed price, making it easier to compare your offers with those of other buyers. Most of the time, they are sold quickly to people who have already made offers on them before the auctions.

Probate real estate presale or after-market auctions can be a good source for decent investment properties. However, there are certain things to consider before buying any property.

1. Keep Your Budget in Mind

Probate real estate presale is not just for those who have a large budget to invest in property. There are a lot of discount houses available at reasonable prices. Take the time and compare costs. You might be surprised with what you can get instead of paying high prices on other properties that may be more likely to become devalued over time.

2. Research the Property

Make sure you do your research before making any purchases. This includes learning about the surrounding area as well as the history and current condition of the property. Armed with this knowledge, you will have a better idea of what to expect in terms of maintenance.

3. Community Information

Properties in probate real estate presales are usually different from traditional houses. Therefore there will be specific changes that need to be made to get rid of problems promptly. The current owner might have maintained the property, but this is no longer possible. Keeping this in mind, you need to ask questions about what needs to be done for the house to become livable again.

4. Make an Offer

It may seem like a good idea to bargain the price down as much as possible, but you need to be fair to yourself and the seller regarding a fair price. The deal will be dead if the seller is not happy with your offer. Once you have made an offer and the seller has accepted, make sure all terms in the contract are carefully read over and agreed upon before signing.

How to Sell Probate Real Estate

If you ever find yourself in the position where you need to sell probate real estate, it’s important that you don’t do it alone. Make sure to get a probate attorney who can help you with the process. Probate properties can come with a lot of hoops to jump through legally, so having a professional is essential to getting your property sold quickly and legally. You can then work with your county to distribute the notice of probate and help you get your property sold faster. 

Summary

If you are looking for affordable properties, probate real estate investing can be a tremendous asset to you. These properties are often able to be sold quickly and for a reasonable price. Many people avoid buying probate properties because of the work involved. You will need to source them and work with whoever inherits the property. Often, you will be tasked with removing the belongings inside of the house as well. But, in return, you’ll get a great deal on a property. 

While this may seem like an odd way to invest in properties at first glance, you are almost always doing a huge favor for the person looking to sell the home. If multiple people inherit it, selling it quickly and dividing the money is usually their best approach. Others simply don’t want the burden of having to take care of another home. You can help them get paid quickly and take care of the house for them. 

The best way you can set yourself up for success is to do all of your research before jumping in. Familiarize yourself with after-market auctions and how they work. Speak to other investors with experience in probate real estate investing. Ask them about mistakes they made early in their careers. Once you feel confident, it’s time to get started. Carefully research the homes you are interested in and be diligent. Only invest in properties that you can confidently say, based on your research, will be profitable. 

To learn more about real estate investing and how to start making money, make sure to check out all of our other articles.