When a property owner dies, their estate enters probate, which is the legal process of distributing the deceased person’s assets. If the deceased person owned real estate, that property must go through probate before it can be sold.
Probate real estate can be a great deal for investors—but it’s not without its risks. In this post, we’ll explore the pros and cons of buying probate real estate so that you can make an informed decision about whether or not it’s right for you.
The Pros of Buying Probate Real Estate
There are a few key reasons why buying probate real estate can be a great investment. First, you may be able to snag the property at a below-market price. Because the deceased person’s heirs are often eager to sell the property quickly to receive their inheritance, they may be willing to accept an offer below the market value.
Second, you may be able to avoid competition from other buyers. Because most people are unfamiliar with the probate process, there may not be many (or any) other buyers interested in purchasing the property. This lack of competition could give you more negotiating power when making an offer on the property.
The Cons of Buying Probate Real Estate
Of course, buying probate real estate also has some potential downsides. One is that the probate process can take months (or even years) to complete, which means you may have to wait a while before you can take ownership of the property.
Another is that there could be unknown liens or debts attached to the property that you’ll be responsible for paying off if you purchase it. Finally, because you’re dealing with an emotional issue (the death of a loved one), there’s always the possibility that the sale will fall through—no matter how much effort you’ve put into making it happen.
If you’re considering probate real estate, there are pros and cons to consider. On the one hand, you may be able to purchase the property at a below-market price and without much competition from other buyers. On the other hand, however, the probate process can take months or even years to complete, and unknown liabilities could be attached to the property. Whether or not buying probate real estate is right for you depends on your risk tolerance and financial goals.
Also, read: 5 Pathways to Becoming a Good Real Estate Investor Today
Author: Rachelle Wilber
Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym.
