Selling a House in Probate
We buy houses in Buffalo, NY. At Arcane Properties, we are a great option if you are looking to sell your house, especially if you have a house you want to sell quickly. This is often the case when a loved one passes leaving a house. Whatever the reason, selling your house quickly can be both stressful and hard to do. When the house is part of an estate that several people will inherit, selling the asset is typically the easiest way to divide the inheritance. Selling a house in probate can be a complicated process. It is important to understand the basics of selling, and buying, in probate.
What is Probate
Probate is the legal process where a will, and all aspects of the will, are proved to be legal and valid. During the process, all heirs to the will are notified. If there is no existing will, probate is the time where the heirs will be determined.
Once a will is determined legally valid, an executor will be chosen.
If there is a will, the executor is typically named in the will. When there is not a will for an estate, the probate court will determine the heirs as well as the executor. The majority of the time, the court will select the closest living relatives as the heirs when there is no will. In the case of no executor, the court will determine the closest relative of all heirs as executor.
The court will obtain all outstanding debts from the deceased including those from creditors and unpaid taxes. These amounts are deducted from the estate before the funds and assets are divided amongst heirs. All assets will be transferred into the name of the heirs or executor at this time. If there are any objections to the will, heirs, or executor, the objections are heard and decided by the court during this time of probate.
Buying and Selling in Probate
It is important to first note if you do not have experience either buying or selling in probate, hire an experienced real estate agent. There are procedures and protocols, specific to real estate in probate, that do not exist in regular real estate transactions.
Because of this added bureaucracy, there are Certified Probate Real Estate agents or CPRE agents. A CPRE agent has experience maneuvering through the probate process to ensure the sell is compliant and closes. Any house that is being sold under probate must be listed as such.
Once you have hired your CPRE agent the procedure for probate real estate transactions should go as follows:
Conduct a home appraisal. This is a standard step in buying and selling regardless of whether a house is in probate or not. The difference with probate is that the offer must be at least 90% of the appraised value. There no possibility to negotiate the price lower than this.
Place an offer. Any offer placed must be accompanied with a 10% deposit in the form of a cashiers check.
Notice of Proposed Action is sent to the heirs of the property. After the notice has been received, the heirs have 15 days to respond in the form of an objection or approval. If all the heirs agree, or fifteen days pass without a response, the sale will occur in court.
Sale of property, with the possibility of an overbid, occurs in court. Unlike a traditional real estate transaction, a probate sale occurs in court. During this court proceeding, anyone attending the proceeding has the possibility to place an overbid. Counter-bids may also be placed during this time. This period of open bidding ends with the highest bidder, just like an auction.
Placing an Overbid
There are some criteria for placing an overbid. The first, the bid must exceed the original offer by 5% and $500. If the overbid is successful and accepted, the 10% deposit must be returned to the party that placed the original offer. The winner of the overbid must immediately remit the 10% deposit, in the form of a cashier’s check, during the court proceedings.
Closing typically occurs within 15 days of the court proceeding. This holds true whether or not there is an overbid. In the case of an overbid, the closing contract cannot have any contingencies.
Even though the process of buying or selling in probate sounds complicated, it is possible and it happens often. Make the process as smooth as possible by using a real estate professional certified and experienced in the procedures of probate. It is a decision that can save you a lot of time and effort.
We buy houses in Buffalo. We buy as-is for cash, we cover the closing costs, and we close on your timeline. For more information contact us today at (716)-800-1414