The real estate industry offers lucrative investment opportunities wherein people can profit significantly by buying and selling properties. However, what’s important here is to identify properties that are worth investing in. The purpose of any real estate investor or businessman is to buy low and sell high. That’s how one can earn profits and survive in the long run. Properties sold under the distressed categories such as a probate sale or a foreclosed property are ideal picks for property investment. Since such properties are priced less than the market standard rates, they are a great deal for potential buyers.
A successful real estate investment is all about strong networking and market study. If you too are intrigued by the concept of investing in distressed property to make substantial gains, this blog is for you! Being in the industry, you must have heard about probate sales and the high price rebates that follow such deals. But are all these properties worth investing in? Well, certainly not! While low prices remain an alluring factor, it is essential to locate properties that have the potential to be sold at higher prices in the future. Since distressed property is mostly in abandoned conditions, sometimes they can be irreparable. Hence, it is important to invest in properties that can be repaired and restored to a liveable condition.
Probate sales & the process
A probate sale is a legal process that involves the transfer of property ownership in exchange for a standard amount that is agreed upon by the court as well as the buyer. Properties are listed under the probates category when their owner dies without leaving a will or any bequeathed heir. In such cases, the property sale is done under the supervision of a probate court that oversees the entire process to ensure that the money received is used to clear all outstanding debt while the remaining amount is handed over to the beneficiaries.
A probate sale follows the process similar to any other property sale barring a few exceptions. After a probate property is identified by the court, an executor is assigned the responsibility to fetch potential buying bids for the property. Typically, the executor is a close aide of the deceased owner who can hire an experienced real estate agent to get the property listed and marketed for sale. When a mutual selling amount is agreed upon by the executor and the buyer, it is sent for the court’s approval. Thereafter, the property sale is done following an auction format where the last bidder is the final buyer.
Things to look for while investing in probate sales
Some real estate investors prefer to avoid distressed properties, especially those going through foreclosures or probate sales. Despite such deals offering high money-making opportunities, there are certain limitations to them that deter many potential investors. A probate sale can be time-taking and does not guarantee ownership up until the contract is signed. As a result, most real estate businesses avoid spending time, money, and effort on buying probate properties. But, this shouldn’t be your reason to move away from exploring such lucrative investment opportunities.
Real estate investments and risks are inseparable, it’s a fact! Those thriving in the real estate market are used to taking risks by making calculative decisions. Anyone willing to stay in this industry for long has to deal with uncertainty most of the time. However, this doesn’t imply being oblivious and accepting every sale offer that comes your way. Talking about a probate sale, there are certain things that you must consider before making a deal. The foremost thing is to decide your purpose of buying the house i.e. to live in it or hold it for future resale. If you are looking for an instant purchase to shift houses or offices, probate might not be the best option for you. On the other hand, if you are willing to purchase for a future resale, going through the probate sale process is a wise decision.
Property inspection is a must in case of any distressed property sale. Most people tend to overlook the fact that any foreclosed or probate property is sold in ‘as-in’ condition. This implies that the property has had zero maintenance in the past as the property owner had died or run out of money to pay for it. Hence, before paying the advanced deposit, it is essential for homeowners to conduct a thorough property inspection to figure out any major issue that may be irreparable in nature. Although distressed properties are likely to need repairs and renovations, it is important to assess the repair costs to make a justifiable buying bid.
Investing in a probate sale property is a bankable deal; however, it is important to be mindful and patient throughout the process. Getting a thorough property inspection is essential in analyzing the condition and deciding the justifiable purchasing amount. Since a probate sale is monitored by the probate court, the chances of duping and fraud are eliminated. Time is a viable concern in this regard that can be resolved by working closely with reliable real estate agents.
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