Why Probates Are a Great Source of Real Estate Deals By Dave Dinkel
Wills must be probated through the court system for the legal
heirs to be determined. The beneficiaries of these wills generally sell
the properties rather than keep them. Because of this, probates offer
real estate investors excellent sources of motivated sellers.
The
typical probate must be entered into the court system by an attorney.
Some individuals have properties in multiple states and countries and
each of these jurisdictions will likely need a probate completed on the
estate in order to sell its assets. Uncontested wills can take 3 - 6
months or less to probate while contested wills can take years.
Especially with larger estates, properties must be sold to pay Federal
and State estate taxes or penalties, and interest can eat up the
remaining assets.
Most children of elderly or ill parents opt to get a quitclaim deed from their parents before they pass. However, they often wait until the parent passes to record this deed. The problem is that the buyer of these properties will have to get a probate done to get clear title to the property. Sometimes relatives, who expected they should get the property or part of it, take legal action to secure their interest.
Once the court has adjudicated that specific individuals or entities are legally entitled to the assets of the estate, these assets can be sold and the funds distributed to the heirs. If the will is still in probate, the court may receive the proceeds of the sale to pay for the expenses of the court and the attorneys involved and to make distributions from the court system.
For investors,
the challenge of finding probate properties is two-fold. First, the
probates must be found in the public records and the court filings. Not
every probate has a property as an asset so the ones with real estate
must be sorted out. Often homesteaded properties are free and clear of
any mortgages but sometimes they are upside down and in foreclosure or
have a reverse mortgage in place. These mortgage situations present
special problems that may not be able to be cured.
Secondly, the beneficiaries are often distraught about the family member's passing and live out-of-the area. Because of this they want a swift resolution to selling the property, however, they tend to overvalue the property because of possible offers they had in the past or because of a local realtor trying to sell them a listing by over-evaluating the property.
The
best way to approach these heirs is to use an ongoing campaign of
letters, postcards, and an occasional telephone call. Somewhere in this
stream of continuing contacts with them, they should be sent a local
market analysis explaining the reason for the amount of your offer for
the property. While some of the beneficiaries will want to list their
properties, most will not because of the condition and work needed to
clean out the years of accumulated "stuff."
When the sellers get motivated the price they will be receiving will be much less important than the solution to getting rid of the property. Often, the way to get the seller to agree to a low-enough price so an investor can make money re-selling it, is to offer to clean out the property completely after the closing.
All the seller has to do is make one last trip to the property and take out any and all personal or other items they want. All the rest will be donated to a worthy charity or taken to the dump. The seller should also be reassured that he or she can do the actual closing remotely. This means without having to come back to the city where the property is--from your attorney to a local attorney where the heir lives.
Article Source: http://EzineArticles.com/5616252
Most children of elderly or ill parents opt to get a quitclaim deed from their parents before they pass. However, they often wait until the parent passes to record this deed. The problem is that the buyer of these properties will have to get a probate done to get clear title to the property. Sometimes relatives, who expected they should get the property or part of it, take legal action to secure their interest.
Once the court has adjudicated that specific individuals or entities are legally entitled to the assets of the estate, these assets can be sold and the funds distributed to the heirs. If the will is still in probate, the court may receive the proceeds of the sale to pay for the expenses of the court and the attorneys involved and to make distributions from the court system.
Secondly, the beneficiaries are often distraught about the family member's passing and live out-of-the area. Because of this they want a swift resolution to selling the property, however, they tend to overvalue the property because of possible offers they had in the past or because of a local realtor trying to sell them a listing by over-evaluating the property.
When the sellers get motivated the price they will be receiving will be much less important than the solution to getting rid of the property. Often, the way to get the seller to agree to a low-enough price so an investor can make money re-selling it, is to offer to clean out the property completely after the closing.
All the seller has to do is make one last trip to the property and take out any and all personal or other items they want. All the rest will be donated to a worthy charity or taken to the dump. The seller should also be reassured that he or she can do the actual closing remotely. This means without having to come back to the city where the property is--from your attorney to a local attorney where the heir lives.
Article Source: http://EzineArticles.com/5616252
