Probate is the legal process that happens when a person dies and the executor must collect all assets, itemize all remaining debts and after that liquidate all property to pay debts and allocate assets. Unlike property in a trust, probate requires court approval and is a time-consuming process with attorneys and judges. Despite that, here are why probate properties can be the very best deals in Miami-Fort Lauderdale-Tamarac-Coral Springs
A Motivated Reason To Sell
The probate process can possibly be lengthy. While every single thing must undergo the judge for approval, if there are few debts and adequate assets, executors may be motivated to sell sooner than later to avoid continuing maintenance, real estate tax bills and the potential of market conditions declining as the property sits vacant.
This is an opportunity for an investor to present a reasonable offer, often still under fair market value, and engage the seller in negotiations. Understanding the process of probate allows a savvy real estate investor in order to help an executor quickly complete probate proceedings.
Your leverage as an investor is particularly strong in slow real estate markets where there aren’t a considerable amount of retail buyers. Without a lot of offers arriving in, the executor is eventually forced to take an offer to close escrow and distribute remaining assets.
The Lengthy Process Reduces Competition
Anyone who has ever bought a property through the probate process will tell you it requires patience. The process lingers; it’s that simple. As a result of this, not a great deal of buyers wish to participate in the process. This means you have reduced competition not just among standard consumer buyers wishing to get a deal, but many other investors who don’t would like to be confined in a lengthy deal. Most investors would like to get in and out as quickly as possible.
Even when the property gets listed on the market place, the idea of probate frightens many from even trying. For an investor who has time and determination, this means you could be among few, if any, offers to follow to the table. Reduced competitors certainly helps to negotiate the very best possible price and terms for you.
Having the ability to structure your deals as cash also gives you a leverage point against a lot of competition. Executors don’t intend to go in and out of escrow. Once they accept an offer, they want it to close as rapidly as possible without financing hold-ups.
Primed for a Quick Fix and Flip
Most probate sales are completed “as is”, meaning the buyer isn’t requesting any repair or credits during the escrow process. Executors enjoy this because they don’t wish to cope with the hassle of making any repairs as they deal with all other aspects of closing probate.
Many probate sale homes are distressed to a certain degree but rarely to the level of distress of a foreclosure. The kind of distress that a probate property remains in often is the end result of an elderly homeowner unable to ideally maintain the home as a result of a limited budget or physical conditions. A foreclosure is often distressed because owners losing their home often do intentional damage away from frustration.
Because the probate home usually only needs limited repairs and updating, a fix and flip investor has the ability to get involved in and out of the property much faster. Certainly, this is once probate approves the transaction. Once it has, investors are poised for a faster return on investment.
Watch out on probate court lists. Use them as a way to find opportunities that investors aren’t considering. As you work through several probate properties, you will get a better understanding of effective ways to collaborate with executors and courts and efficiently close escrow to rehab properties and sell them for a profit.
These are not the only reasons why probate properties could be the best deals in Miami-Fort Lauderdale-Tamarac-Coral Springs but certainly are just some of the most important.