The Ins and Outs of Buying in Probate
Buying a property in probate can be a fantastic opportunity for homebuyers and real estate investors alike. This particular sector of the property market offers the chance to secure prime pieces of real estate for competitive prices, but it can also present its own set of challenges, as it is often time-consuming and complex to navigate. However, help is at hand – if you’re a buyer considering purchasing a probate property, here’s everything you need to know to get started.
What Does Buying in Probate Mean?
Buying in probate is the process of purchasing property from an estate that is going through probate, ie. the procedure through which a deceased person’s will is validated.
When someone passes, their assets will have to be distributed according to their will. The buying in probate process will usually take place in instances where the deceased’s assets, including real estate, are sold off to pay any outstanding debts they may have incurred, or in order to distribute the proceeds among any beneficiaries.
Buying in probate can often be a lengthy and involved process, and so usually requires the assistance of court oversight to ensure an outcome that is both fair and on the right side of the law.
What Is a Probate Property?
A probate property simply refers to any piece of real estate that falls under a deceased person’s ownership and is thereby subjected to the probate process.
What Does Probate Pending Mean?
Probate pending simply means that the probate process is currently underway. As there is so much to consider, a probate property might be pending for some time while the estate evaluates and assesses in accordance with the law, such as validating the deceased’s will (if there is one), appraising any other assets, paying of existing debts and taxes, and then distributing these assets accordingly.
If a property is labelled as ‘probate pending’, it is still under court supervision, meaning that any financial proceedings that occur during this time will require court approval in order to be finalised.
What Does Probate Mean For the Buyer?
If you’re a buyer wanting to purchase a probate property, keep in mind that the process can often be more time-consuming than other avenues of property ownership. The probate buying process is lengthy and complex to navigate, but it’s entirely possible with a little patience – and you might even find properties at below-market prices.
With so many legal ins and outs, it’s important to ensure you enlist the help of a property agent or attorney to support the management of the legal intricacies and ensure a straightforward transaction. In the meantime, here are our top tips for purchasing a probate property:
Do Your Research
If there’s a probate property you’re interested in, it’s important to conduct in-depth appraisals and inspections in order to understand the condition and true market value of the property.
Have Patience
Be prepared for potential delays to occur while the court goes through the process of validating the sale. Offers on the property may be subject to court approval, and could also require overbidding in a public auction.
Know the Bidding Rules
If there is an auction involved, make sure you familiarise yourself with the particular bidding rules prior to making an offer so you understand exactly what you need to do to secure the sale.
Secure Financing
Because the probate buying process can be time-consuming and unpredictable, it’s important to have all your financial affairs in order so you’re ready to close the sale as soon as everything is approved.
What Role Do the Executors Play in Probate?
The executor plays a crucial role in the process of buying probate property. They are responsible for:
- Filing the will. The executor is the person who submits the deceased’s will to the probate court in order to start the entire process.
- Managing the estate. From property to investments, and personal items, the executor is responsible for collecting and inventorying all the deceased’s assets.
- Appraising assets. The executor will ensure the estate’s assets are properly appraised in order to determine their value.
- Settling debts. Any outstanding debts or taxes owed by the estate must be paid during the process of buying a probate property.
- Distributing assets. Once the property has been purchased, the executor must also distribute the remaining assets to the beneficiaries as outlined in the deceased’s will, or according to the law in cases where there is no will.
- Keeping records. The executor must keep a detailed log of all proceedings as they take place during the buying process, including all transactions and communications.
- Court interaction. The executor is also responsible for reporting to the probate court and is required to seek approval in order to undertake certain actions according to the buying process.
How Long Does Probate Take When Buying a House?
Time-wise, the probate house sale process can take anything from six months to over a year to finalise. However, this can vary depending on several factors, such as:
Legal Proceedings
Court schedules will differ, and are often subject to change – availability and backlog can significantly affect the timeline of a probate property purchase.
The Estate
Depending on the complexity of the particular estate, the time taken to process a sale may differ. Often, larger estates will take longer to settle.
Disputes & Contests
Along the way, disputes may occur between beneficiaries – heirs may even contest the will, which can prolong the process.
Required Approvals
If a probate sale requires court approval, this will add another step into the buying process and add more time to finalise the procedure.
Do You Pay Stamp Duty on Probate Property?
Just as with any property purchase, buyers are required to pay stamp duty on probate property. This is a tax levied by the government on the transaction and will differ depending on the property’s purchase price and the local regulations in the area of the property. It’s important to bear this in mind if you’re a buyer budgeting for a probate property purchase and consider consulting with a real estate agent to ensure you get to grips with the specific stamp duty obligations in the area you’re looking in.
Are you interested in probate property and want to make sure you’re navigating your purchase with confidence? Our team of professional lettings and estate agents is here to help. Our combined in-depth knowledge of the local market and years of experience dealing with probate property purchases means we’re fully equipped to guide you every step of the way, with an on-hand team dedicated to ensuring your transaction is as smooth and straightforward as possible. Get in touch today to find out more about how we can help you secure your dream home.
