Table Of Contents
- What is a probate sale
- Not all probates are created equal
- Are probate homes a deal
- Tell me how to find a Glendale CA probate homes for sale
- Do I need all cash to buy a probate home?
- How do I get my offer on a probate home accepted?
- What happens once my offer on a probate home is accepted?
- What is an overbid on a probate home?
- What happens at the court confirmation hearing for a probate home?
- What happens if I am the winner of the probate home for sale?
- Important Stuff To Consider when Buying A Probate Home For Sale
What is a probate sale?
When a person dies and the home is sold it is considered a probate sale. There are still Glendale Ca probate homes for sale that need court confirmation as part of the sale process. The entire process is designed to notify anyone who might be interested (potential buyers) or have an interest (potential heirs) to “speak now or hold your peace”.
Not all probate homes for sale are created equal
There are several situations where the home of a deceased person is sold and the process is nearly identical to a normal sale. We are not addressing these situations in this article.
Are probate homes for sale a good deal?
List price is set by a court-ordered appraisal and the listing agent. If a court confirmation is required, the list price is usually lower than “market”. Don’t get too carried away! The entire process is designed to make sure the property is sold for a decent price. The process is a lot longer, the buyer can get beat out at the last minute and there are no repairs or contingencies.
Tell me how to find Glendale CA probate homes for sale
All Glendale Ca probate homes for sale are listed on the Multiple Listing Service and syndicated to internet portals like Zillow and Realtor(dot)com. Remember, the purpose of the court confirmation process is to ensure all interested parties know about the sale and have a chance to speak.
Do I need all cash to buy a probate home?
No, it is possible to use a mortgage just as in any other purchase.
You need to have at least 10% of the sales price, in cash, at the time you submit an offer. The rest can be financed by a mortgage, however, you must be 100% certain your loan will be approved and funded. If anything happens to prevent this you will lose your deposit.
How do I get my offer on a probate home accepted?
The law says the home must sell for at least 90% of that court-appointed appraisal value. Assuming the list price is that value, your offer must be no less than 10% off that price. However, all bets are off if there are other buyers making an offer.
If there is no competition from other buyers, do a little math. Your number should be just high enough that the “overbid” amount is unattractive to potential competitors.
Demonstrating an understanding of the probate process is critical to getting your offer accepted. Do this by including the following in your offer:
- Offer to deposit 10% of the offering price into escrow upon acceptance
- Have your inspections completed or waived
- Demonstrate funds for an all-cash transaction or include a strong pre-approval from a reputable lender
- Indicate your understanding and acceptance of the court confirmation process and timelines
- Indicate your understanding that the deposit is non-refundable unless you are outbid by another buyer in court
What happens once my offer on a probate home is accepted?
The administrator will take your non-contingent offer to the court and ask for a confirmation hearing date. This can be as short as 30 days, but 60 is more likely. During that entire time the listing agent is required to try and attract a competitive bid- the home will be active on all the internet portals and they may even hold the home open.
What is an overbid on a probate home?
The list price is now the official overbid amount. The formula for this amount is set at 10% of the first $10,000 plus 5% of the balance.
This means if your accepted bid is $500,000 the advertised overbid amount is $500,000 + $1,000 + $24,500 = $525,500.
What happens at the court confirmation hearing for a probate home?
There are three possible situations:
- There are no other bidders. Your original offering price is now the official sales price and you can move forward to close the escrow
- There are competitive bidders and you decide to bow out.
- There are competitive bidders and you enter the process as one of the bidders
The judge will decide on the bid increments based on factors like the offering price and the number of bidders. Increments can be anywhere from $500 to $5,000 or more. He/She will keep asking for more bids, auction style until there is only one buyer left standing.
If you are the “last person standing” you must give a personal check to the court for 10% of the overbid amount and you will proceed to close. If you are not the court will return your original 10% deposit in about 10 days.
What happens if I am the winner of a probate home for sale?
It takes about 30 days to clear the last of the required procedures and paperwork in order to close escrow and transfer title. During this time you will process your loan (if you have one). Remember, if anything goes wrong with the loan and you cannot close escrow you will lose your 10% deposit.
Important Stuff To Consider when Buying A Probate Home For Sale
Buying a home in probate can be a better deal than a regular sale, but there are some big cautions to consider.
- There are no disclosures and everything is “as-is” condition
- Do ALL your homework before turning in your deposit. It is assumed the seller has no information, so you are completely on your own.
- 10% deposit is required upfront and held for months
- This deposit is non-refundable! The only way you get it back is if you are outbid at the court hearing
- You are committed to this home until the waiting period is complete
- You lose the ability to pivot and buy something else
- You won’t know if you will get the home, or the final sales price, until the court date
- The waiting is stressful, and so is the court date.
We Can Help You Buy or Sell a Probate Home
I bought my first Glendale CA home with a probate court confirmation process and it was the most stressful home purchase of my life.
It also turned out to be one of the best purchases of my life and the listing agent was the wise guide who helped me every step of the way.
If you are interested in buying or selling a Glendale CA probate home fill out this quick form.