What Is A Probate Sale?
The Pros And Cons Of A Probate House Sale
When someone passes away, they have personal and real property that must be passed onto their heirs. Your loved one may have had a Will that says what they would like to happen with their belongings, or they may not have had one. In some cases, a probate sale may become necessary. When this happens, heirs should understand how the process works and why it is necessary.
When Is A Probate Sale Needed?
A probate sale becomes necessary when a property owner dies and doesn’t leave a Will. In order to sell the property, heirs must go through probate. Once probate is opened, the property is sold, and all estate debts are paid, the proceeds of the sale are distributed to the heirs.
Why Is Real Estate Sold Through The Probate Court?
Real estate must be sold through probate court when the property owner has passed away. In most cases, the decedent didn’t leave a Will listing who should receive the property or if the property should be sold.
The probate court is involved in the estate until the probate has been closed with the court and estate administration is complete. In most cases, the court must approve the sale of the home before any sale can be completed.
The Personal Representative is in charge of this task as well as distributing the estate. It’s important to note that the Personal Representative doesn’t own the decedent’s assets, and they have no power over how they may be distributed. The court must supervise the estate and make sure that the terms of the Will are followed (if there is a Will) or that the estate is handled according to Michigan law.
Can A Probate Real Estate Sale Be Used To Cover Outstanding Debts?
If the person who passed away didn’t have enough money to pay off creditors and other outstanding debts, then the Personal Representative will need to sell assets in order to pay off those debts. In most situations, debt does not go away once you pass; it follows you to your estate.
What Does It Mean When A Sale Is Subject To Probate?
If you are selling a home in probate, the sale may need to be approved by the probate court in some instances. The need for probate court approval may slow down the process of selling the home.
Can A House Be Sold While In Probate?
The executor may sell a home that is in probate. Keep in mind that any debts must be paid prior to the money being distributed to the heirs.
How Do Probate House Sales Work?
A probate sale first begins when the Personal Representative hires a real estate agent. The agent will list and show the property to prospective buyers. Since the home is in probate, it may be a good idea to hire an agent who has experience with these types of sales. If they have experience, they will know what to expect during the process and be more prepared.
Once an offer is made, the Personal Representative must decide if they will accept the offer. The court must approve the sale, which may take weeks to months in some cases. Once the court approves the sale, then the Personal Representative can move forward with the transaction.
How Long Does It Take To Complete A Probate Sale?
A probate sale can take quite a bit of time to complete. The length of time may differ depending on if the probate is supervised or unsupervised. If it is supervised, the court must approve the sale, which can cause it to be lengthy. This portion of the probate can become complicated, so many people hire an attorney to handle the process.
Characteristics Of A Probate Real Estate Sale
These types of sales have a few unique characteristics compared to other property sales.
- Most properties are sold “as-is”. This happens when heirs or the Personal Representative doesn’t have the time or resources to update a home before they sell it. The buyers may still want a home inspection even if the home is sold “as-is.” They may do this just so they are aware of any potential issues and don’t have any surprises down the road.
- The buyer may need to make a deposit. The buyer may need to make a deposit when they place their offer. This money is in addition to the down payment, and the money may go towards the down payment once the sale is complete.
- You may be able to keep the property listed, and other potential buyers can make offers. If you receive a higher bid than the original offer, then the original buyer should get their deposit back. They can also make a high bid if they don’t want to miss out on the home.
- Closing on the property can take time. Closing may take a few months since the court will likely have to approve the sale.
Probate sales may be a risky move for some buyers. Every state has its own rules and it can be overwhelming for those newer to real estate. Because of this, it’s in your best interest to work with a probate attorney and an experienced real estate agent because, if you don’t, you could potentially lose the sale and the down payment.
You should also keep in mind that anytime a court is involved or a mourning family, there will likely be many delays.
Also, since the previous owner has passed away, they aren’t able to disclose any problems with the home, so it’s very important that you get a thorough inspection of the property.
Cons Of A Probate Sale
- The process of purchasing a home can be lengthy
- Probate homes are typically in bad condition or need many repairs
- Probate transactions can become complicated
Pros Of Buying Through A Probate House Sale
There are many positive things about purchasing a home through a probate:
- The sale price of the home may be lower. This is usually because the home is more complicated than a regular home sale.
- They provide the opportunity for investment that isn’t typically available through regular real estate home sales.
- There is less competition in probate sales. People generally aren’t interested in probate homes, so there’s less competition.
This generally helps investors in the long run because of how much they will save.
Are These Transactions Cash Only?
Probate homes are like regular home sales. They don’t have to be cash only. However, a cash offer may be more appealing to a seller.
Should You Buy Property Through A Probate Sale?
A probate sale may not be the right fit for everyone. If you are considering buying a probate home, you should think about the pros and cons and what is most important. If you want to get a house quickly, then this type of arrangement likely isn’t for you. If you would like a good deal on a home, then it may be a good option since probate homes typically sell below the market value.
Another thing to consider is the cost of home repairs. If you’re able to do the work yourself, or if you have enough money to hire someone to do it for you, a probate home sale may be a good option for you.
If you don’t have a ton of time or money to put into home repairs, then a probate home sale may not be a good choice for you. If you don’t like surprises or any unknown concerns, then you may want to consider purchasing a home that isn’t in probate. Even if you do a home inspection, there may be other random costly issues down the line.
Overall, it is up to you to decide if the pros outweigh the cons.
Do I Need A Probate Lawyer For A Probate Sale?
A probate sale is a good way to get rid of any real property owned by someone who passed away. Any proceeds go into the estate and are later distributed to heirs. The process can be complicated and longer than a regular home sale, so it’s best to understand the process and how it works for both parties. It is in your best interest to hire an experienced probate attorney who is familiar with probate home sales and can make sure the process is done correctly in a short amount of time.
The probate process in Michigan can be complicated, long, and confusing.
Our probate attorneys can help you quickly and easily navigate the process so that your loved one’s money and property can be distributed to their heirs in the manner in which they intended.
At Rochester Law Center, our compassionate and dedicated Michigan Probate Lawyers are experienced in all matters of probate administration and serve every county in the state of Michigan.
We make probate fast, easy, and stress free by acting as your guide through the complicated paperwork and legal proceedings you’ll undoubtedly be facing throughout the Michigan probate process.
We understand the intricacies and nuances involved with probating an estate and can help you navigate every step of the way while keeping costs as low as possible.
Call us today at (248) 613-0007 for a free case evaluation.