When a homeowner passes and doesn’t have a revocable living will in place, the most common scenario is for the property to go into probate. And if the owner dies owing significant debts, the property will have to be sold off to pay creditors. Most of the time, homes in probate are marketed and sold much the same as traditional properties – but the process can be quite a bit more complicated. So whether you want to buy or need to sell, read on to find out how to handle a probate property in New Jersey.
How Probate Sales Work
Though the process of selling a probate property varies from state to state, there are some common steps across the board . . .
- The court appoints an estate representative, or executor, who is responsible for settling the estate and guiding it through probate.
- The executor then has to liquidate as much of the estate as needed to pay creditors.
- Then the court orders an appraisal and sets a listing price.
- The executor petitions the court for permission to sell the home after receiving an offer from at least one buyer.
- The heirs and beneficiaries are notified about the offer and permission to sell, and if none of them files an objection, the sale can move forward.
- In the case of multiple offers, interested buyers must appear in court to submit their bids.
- The highest bid wins, and that bidder must then present a cashier’s check for a minimum of 10% of the offer price to the executor or administrator.
Pros and Cons of Buying a Probate Property
There are both pros and cons to buying probate property that potential buyers should be aware of in knowing how to handle the purchase.
Pros of Buying a Probate Property
- Often sell at very reduced prices
- Can be a good opportunity for investors who want a good return on their investments
Cons of Buying a Probate Property
- May be unknown defects/problems with the property
- Contingencies are not allowed in the bidding process
- Often a lengthy closing period
- Maybe additional fees
- Sale can’t occur until the IRS is assured that no estate taxes are owed
Steps in Selling a Probate Property
Now if the sale of a probate property falls to you, here are the steps you’ll need to follow…
- Get named as the executor by the court.
- Hire a probate attorney and petition the court to begin the process. You will need the attorney (and possibly a New Jersey real estate agent) to help guide you through the whole process.
- Inventory the estate. This will entail gathering all the pertinent, important documents such as will, proof of assets and debts, and life insurance policy.
- Hire a local real estate agent. You will need the services of an agent if you intend to sell the probate property, particularly when it comes to assessing fair market value. (You can contact an experienced New Jersey agent at (908) 320-7995.)
- Take care of the finances. After inventorying the estate, you’ll need to notify and pay off creditors.
- Wait while assets are transferred and for the sale to occur. If the probate property is being sold in court, a price will have to be decided, it will have to be listed, and then it will be put on the market. After an offer has been submitted, a notice will be mailed to heirs who will then have 15 days to object to the sale. If there are no objections, the property will be officially processed in court.
Get the Assistance You Need
If you think handling a probate property in New Jersey sounds like a complicated process, you’re right. Your best bet, then, is to work closely with an New Jersey agent who has extensive experience with probate properties. And we have agents who can help you successfully navigate the process. So if you’re facing dealing with probate property, don’t hesitate to contact us at (908) 320-7995.