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What should families know about probate sales?

On Behalf of | Apr 14, 2022 | Estate Planning |

A dying estate is when a person dies without a will in Concord, California. The property and assets of the deceased enter probate. The probate court oversees the process, which follows the procedures of the state. The probate process tends to sell the real estate in a dying estate at a high price to maximize the estate’s value.

Differences of probate sales

There are many differences between probate sales and regular sales under probate/estate administration. Unlike regular sales, the probate court controls probate sales. A real estate agent sells the property during a probate sale, but the court retains control of the progress. The probate court sets the price and sometimes uses a home appraisal. The buyers of the property need a minimum 10% down payment. The state representative may accept the highest offer, but the probate court has the final decision. The probate court decides whether to accept the offer at a hearing. The hearing is more of an auction because people can offer higher amounts to the probate court. In California, a bidder needs 5% plus $500 more than the accepted bid.

Risks and benefits of probate sales

Probate sales can be risky for buyers, and every state has its own probate regulations. The regulations of the probate process can be overwhelming for buyers. A real estate attorney and agent can help a buyer follow all the probate court rules. Buyers that don’t follow the probate process may lose their sale and down payment. Between the bereaved family and the probate court, there are potential delays when buying property. One issue when buying real estate from a dying estate is that the deceased homeowner can no longer explain any issues with the home.

There are reasons that many real estate buyers and investors like buying property at probate sales. The prices of probate property may be lower since probate sales are more complicated. Tight real estate markets offer investment opportunities through probate sales. People considering buying property from a probate sale should consider the risks and benefits.