Buying Probate Properties

Written by Johnny Kitchens
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Probate properties quite often are sold at below-market costs, resulting in significant savings for the buyers and often even more significant profits if the properties are then re-sold. Probate is the process by which the court verifies and carries out a deceased person's last will and testament by distributing their assets. Probate is also required for distribution of a person's assets who dies intestate (without a will). Probate can often drag on for years.

If a person dies with outstanding debts, creditors are often given several months to make their claims before assets are distributed. During this process, some of the assets (like investment properties, vacation homes, and the like) may need to be sold in order to pay the outstanding debts. Additionally, once the debts are paid and the assets distributed, inheritors are sometimes inclined to sell inherited properties quickly rather than inhabit them or wait to get full market value.

In addition to debt-reclamation sales and sales to liquidate inherited assets, probate properties are also often below market value because they are in need of some refurbishing. In order to actually get fair market value for these properties, investors often spend significant sums on repairs and remodeling. The wisdom of purchasing such properties and taking such actions depends on the condition of the property and the strength of the market.

The Difficulties in Buying Probate Properties

Real estate assets can be in probate for quite a while before offers can be made. The best properties are usually watched by several interested investors and the ones with the most patience and the best timing usually get them. There is the possibility of real profits to be reaped from buying probate properties but unless you happen to get lucky, you should be prepared for a lengthy process. You will also need the assistance of a good IRA advisor, a good attorney, and maybe a good real estate agent.

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