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Buying probate property is often a great way to build an interest in real estate. In many cases, it is possible to purchase a probate house for very reasonable rates once the process of probate has been completed through a court system. While there is a great deal of potential to resell the property and earn a tidy profit, there is also some chance that things will not go exactly as planned, leaving the new owner with property that cannot be sold even after making a number of improvements.
One of the benefits of buying a probate house is that the heirs to the property may be willing to sell for a price that is slightly less than market value. This is often because the heirs have no real desire to use the property themselves and just want to sell it as quickly as possible. A lower purchase price on the front end, especially one that is lower than the current market value, makes it easier to obtain the financing needed to complete the sale, and also increases the chances of making a few improvements and reselling the house at a profit.
The idea of buying a probate house for resale in a short period of time does have some potential disadvantages. Factors such as the location of the property may limit the pool of potential buyers, especially if the property is in an area that is not considered desirable for some reason. In addition, if the home is found to need complete restructuring of the electrical and plumbing systems, the cost of repairs could easily diminish the amount of profit to be made from the venture.
When considering the pros and cons of buying a particular probate house as an investment, it is important to have the house inspected first. Make sure the basic structure is sound, and that the plumbing and wiring are both up to current standards. This will often mean dealing with cosmetic issues to bring the home up to date and increase the chances of a sale. In addition, pay close attention to the surrounding area. If the neighborhood is declining and there is no chance of a change in the near future, the potential to sell the home at a profit, even after improvements, is greatly limited. It is wise to go with a probate house that is in a desirable area of town, and can be modernized for a minimum investment, then sold for a significant amount above and beyond the overall investment.
@Melonlity -- How do you sell a probate house and get a good price for it? A real estate auction, buddy.
Here's the deal. You can sell both real and personal property at the same time through one of those. A lot of relatives love that option and for good reason. They don't have to go through the stress of packing up a house or any of that. Just hire a good auction company and let those folks do all the work.
Sell the house. Sell the stuff in it. Collect some money. Done.
Do you know what could hurt the value of a probate house? Letting people know it is a probate house. Here's what I mean. People assume they can get a probate house for next to nothing because the home was inherited and the heirs who own it want to dump the thing for a good price.
A good way to counteract that "probate house" stigma is to hire a real estate agent to list the thing just like any other house. That tactic can lead to a higher selling price.
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