THE BASICS
1. Probate courts have various responsibilities, but in regards to real estate probate is the process of distributing the estate of a deceased person, called the decedent. The estate is any property or cash that has not been distributed into a trust.
2. The decedent can either die leaving a will (testate) or not leaving a will (intestate) In either case the estate needs to be probated in order to distribute the assets. (property, cash, real estate)
3. If there is a will, a Testate Estate, the person named in the will as the executor can petition the court to be appointed the personal representative of the decedent and be responsible for disposing of the assets. If that person does not want to serve as the personal representative, or if there is an objection from the heirs, or if that person is not eligible then another person or sometimes a trust department at a bank, can be nominated to serve as the representative.
4. If there is no will, an Intestate Estate, the court will appoint a personal representative, or the heirs can nominate someone for the court to approve. Again, sometimes this is a trust department in a bank.
5. Once a personal representative is appointed that person or trust department is responsible for distributing the assets of the estate to the heir or heirs. If this includes property a realtor will be chosen to help sell the home.
6. If the personal representative asks the court for full authority to sell under the Administration of Estates Act (AEIA) then the representative has the right to sell the real estate without court confirmation.
7. If the representative does not request full authority to sell, or the court does not approve an AEIA, then the sale takes place but needs court confirmation.
8. If court confirmation is needed an offer is accepted by the representative and then a court date is set. At that court date another buyer can come in and offer at least a specified amount over the accepted offer. There can be no contingencies and the first
buyer has the opportunity to beat newer offers. This process is rarely done anymore.
These are just the basics and I'll put another post up later with more details.
But the important question is why should you care?
Well, there is a great reason to care if you are a buyer or a seller. If you are the executer, or personal representative you can see that this is a complicated subject and you should find a realtor who knows what he or she is doing.
If you are a buyer these sales can be a great investment for you. In general, if a home is being sold as a probate sale it means the estate has to sell. It is much better to buy from a seller who has to sell than a seller who wants to sell if they get the right price. You get similar advantages to buying an REO or Short Sale, but a lot fewer hassles.
If you have any questions about probates sales please feel free to contact me.
