What is Probate in Real Estate?
When a person is deceased, their property, whether vacant land or an estate, must be distributed in accordance with the terms of their will. Most of the time, this will be accomplished through probate. The probate process can vary by state, but it is most often the only legal way to become the owner of real estate.
If you are involved in probate real estate, you should be aware of how the process works and how long it takes to complete the probate process. Depending on your role, you must also understand how to locate probate property, buy or sell probate real estate, how much probate costs, and the steps involved in various situations. If you are an heir or beneficiary, you may want to consider an estate loan to avoid the delays associated with probate.
Continue reading to learn more about probate in real estate and how to navigate it with these 8 things you must know.
How Does the Real Estate Probate Process Work?
The basic process of handling real estate in probate is overseen by the courts, regardless of the laws in each state. Before any real estate transaction can take place, the court must generally approve it. During this time, the personal administrator or executor in charge of the estate must abide by any court orders.
If one heir wants to keep the property but the other wants to sell it, or if multiple heirs want to keep the property but not share it, the court will decide what happens to it. Most of the time, the decision will be made to sell the property and divide the proceeds among the heirs.
If you are responsible for selling a real estate asset in probate, you must understand how probate courts sell real estate. Let's take this process step by step:
Establish the Estate Executor
If you will be handling the estate, you must have the court appoint you as executor. The executor is named in the deceased person's will in a testate scenario.
Hire a Probate Attorney
While acting as executor, it would be wise to hire a probate attorney to help you navigate the process. Your probate lawyer will represent you throughout the process and assist you with any issues that arise and will be paid by the estate.
Make an Inventory of the Estate’s Possessions
Make sure to collect all important information and documents when taking an inventory of the estate. This could include estate planning documents like a will, living will, or power of attorney, as well as assets like cars, bonds, stocks, debt, and life insurance.
Hire the Right Real Estate Agent
If you have a home that needs to be sold, a home appraisal should be performed and a real estate agent with experience selling probate real estate should be contacted. The agent will research comparable sales in the area and go over the appraisal to determine what the property's sale price should be.
Manage the Finances
You'll have a better understanding of the deceased person's finances after taking an inventory of the estate. First, you need to notify known creditors that the deceased owes money and pay their claims. The estate can also be used to pay off other debts. Upon satisfying these debts, you must file the deceased's income tax return.
Allow Time for Transfer of Assets
Real estate probate concludes with the transfer of assets. After all bills and creditors are paid and the executor petitions the court for asset transfers, the estate will be legally transferred to the beneficiary.
If, on the other hand, the property is to be sold in court, it must first be listed. The property will be listed for sale once the price has been determined. All heirs of the estate will be mailed a notice giving them 15 days to object to the sale of the property once an offer is made and the terms are agreed upon. If no one objects, the sale of the house will be handled in court.
Bottom Line
Dealing with probate real estate can seem quite daunting and time-consuming, but upon reading how the process works, you may realize it doesn’t have to be so challenging. Our Realtors here with 316 Realty Group are well-versed in the realm of probate real estate and you want one of them on your side. Give us a call if the time comes for you, we would love to assist you in any way we are able!
