Pro-tip: House buyers can occasionally find exceptional deals on properties sold through estate sales.
An estate sale occurs when the owner of a property or an estate passes away without leaving a last will, and their belongings must be liquidated.
In this scenario, the probate court oversees the sale of the estate. Properties at an estate sale often have lower prices – below the market value.
This is due to the following reasons. 1) The beneficiaries or surviving family members don’t live in the house and have no attachment to it whatsoever; and 2) The taxes, utilities, maintenance, insurance, and other expenses accumulate even after the owner’s passing, so the surviving family members prefer to get rid of the property as fast as possible.
In some cases, properties sold through an estate sale are priced lower because the maintenance, such as plumbing and wiring, has been overdue for years, leading to necessary significant fixes and upgrades that are readily apparent. Properties like this are commonly sold and offered “as is.”
A more massive risk for estate sale house buyers may also stem from problems in the house not easily seen. Since the owner has passed and the surviving family members or heirs don’t live in the property, no one is available to disclose any problems in the property.
For these reasons, house buyers must conduct a complete and comprehensive house inspection before even considering buying a property through an estate sale.
While it’s true that estate sale properties often come rife with problems, with determination, creativity, and resilience, house buyers can transform these properties into the house of their dreams.
Where Do I Find an Estate Sale?
Real estate agents specializing in marketing estate sale or probate listings can help you. Generally, estate sale properties are marketed and advertised the same way as standard properties. The surviving family members or heirs of the estate typically hire an agent to sell the property.
Another way to identify probate sale properties is to get in touch with your local probate court and request a list of the most recent probate cases. Check the court’s docket, which can be found online.
The inventory list will tell you whether there’s a house that’s part of the estate. It will also show a brief description of the property with contact information of the property owner (executor of the estate), real estate agent, or estate attorney.
The next step is to ask for a listing price. The price for estate sales is based on the agent’s advisory or an appraisal mandated by the probate court.
If you’re thinking about a house through an estate sale, here are some helpful tips we have compiled.
Start with a Thorough Home Inspection
We’ve mentioned above that a complete home inspection is critical for house buyers. This is especially true for properties sold through estate sales.
House inspectors can help you identify outdated and hazardous electrical wiring, plumbing and sewer line issues, a leaky roof, or a prohibited addition that may significantly decrease the value of the property.
If house buyers get an inspection in early enough, chances are the sellers won’t have a real estate agent yet. If a deal is directly made with the sellers and real estate attorneys without any agents, buyers can save up to 6 percent in agent fees.
Nevertheless, as with any home purchase, all the necessary inspections of checking of property records are required.
“As Is” Properties Require a Lot of Imagination
Usually, house buyers will see properties for sale beautifully presented and pleasantly staged.
They go the extra mile to spruce up the property and make it enticing for potential buyers. Some sellers will even have freshly baked cookies and other treats waiting for house buyers.
Estate sale properties are a different story. These properties are marketed and sold as they are.
No effort whatsoever in making it attractive for house buyers because the sellers just want it off their hands as soon as possible.
Thus, a lot of imagination, creativity, and cash will be required to envision the potential of an estate sale property. A lot of house buyers don’t shy away from this task; after all has been said and done, estate sale properties are still significantly cheaper than a new or second-hand house – even after the renovation costs.