Dealing with a probate property in Sacramento? You probably have a lot of questions, and not so many answers. Luckily, California Family Homebuyers is here to help. Below, we offer some information about properties caught in probate and the best ways to handle the process.
What Is Probate?
Probate is the legal process that sometimes follows a homeowner’s death. The process is initiated when the property was not in a trust, or it was co-owned with another person that did not have full rights of survivorship.
In most cases, real estate that needs to go through probate will be sol, and the proceeds from the sale split up between the beneficiaries (assuming it was not willed to a specific person). The first thing to do with a probate property is to determine where the probate needs to occur; this is most probably the municipality where the property is located.
Then, you will need to hire a lawyer to analyze any existing will and draw up the necessary paperwork for you to stake your claim. A judge typically determines the rightful owner of real estate based on the will — if one does not exist, you may need to supply supporting documents that speak to the deceased owner’s intentions and/or your next of kin status.
Who Pays For Probate?
You can either pay for the probate out of pocket, or you can arrange that the probate costs be taken out at closing. The executor of the estate will determine a listing price for the property, negotiate the sale price, and execute the sale contract. The lawyer that is handling the probate for you will then send their invoice to the title company handling the real estate transaction. The probate fees will be subtracted from the proceeds of the sale of the property. These costs can range from a few hundred dollars to over a thousand dollars, largely determined by the value of the property.
Can I List Probate Real Estate?
You cannot sell or list a property before the probate is completed or without approval from the court, which requires a petition. When the home is listed available for sale, you may take offers on the property and have a contract; however, the closing will not occur until the probate is complete. When the probate case is filed, the title company knows who can legally sell the property — before then, they’re unable to process a sale.
How Much Should I Sell For?
In order to know how much you can ask for the piece real estate, you need to have the property appraised. This not only tells you how much the home is worth, but also reveals any problems with the structure that must be disclosed on the contract for sale.
When you receive offers, you must take into consideration the probate cost. If you own a vacant lot, make sure the offer is enough to cover your bill. Most houses and other types of real estate will sell for way more than the cost to have the probate completed. If you want to sell the probate real estate quickly, you may want to list on the lower end of the market comps or appraisal price, because this will ensure your property receives offers very quickly.
I’ve Accepted An Offer, Now What?
When you have received an acceptable offer, or you have negotiated a price you are willing to sell for, execute the contract. If you have any questions about the contract, reach out to a real estate lawyer to help you understand all the terms, conditions, and riders necessary to complete the deal. When the title company is chosen, make sure you provide the probate lawyers invoice to them so they can take care of the bill out of your proceeds.