I have been investing/listing/selling probate real estate since 1987 and one of the obstacles I had to overcome was dealing with the estates attorney in order to obtain my price. I know most investors and agents who deal with estates think that probate attorneys are a thorn but what I learned over the last 22 years tells me they can be dealt with in a positive way for what your trying to accomplish if you handle this in a certain way.
What I learned was if I contacted the probate attorney first who was handling the estate on a home I wanted to buy, I would most likely not receive any real cooperation let alone my investors price.The reason why wasn't because the attorney did not want my sale to go but because of the liability I believe the attorney felt would be on his/her shoulders if the house was sold too low at the attorneys approval. It's all about CYA folks, and if anyone tells you different, beware.
I believe a major reason the majority of Probate Attorneys want the sale of real estate in probate to go through the court confirmation process is to have the court approve the sale price and terms. This relieves any possible liability on the attorney if the heirs came back 6 months later when they found out the buyer resold the house for $100K more. In California we have two ways to conduct a sale of real estate in probate. This is the court confirmation process and the sale using the I.A.E.A. This law was enacted in 1987 which allowed the estate to treat the sale of property in probate almost like a regular sale.
Today in 2007 more probate attorneys are allowing the I.A.E.A process to handle the sale. How many of them protect themselves from price issues is they require the sale to have the court appraisal and the sale price must be within 90% of the appraised value. This is a joke since under the I.A.E.A there is no appraisal required. The appraisal is required for final distribution of the assets and to figure out any estate taxes but not for the sale purposes. I still run into attorneys today who ask for the appraisal when I'm purchasing the probate property under the I.A.E.A. I usually have my Probate Attorneycontact the estate attorney and correct this issue.
Yes this is over and beyond the process you have to go through in a regular real estate sale but remember we are generating a profit of between $25K to $60K every time we flip a probate so it's worth the extra time and patience. If you don't understand the probate laws and how to use them to your advantage you will find it very difficult to make consistent good buys in the probate real estate arena for your clients or yourself if you are also a principle. The Probate Attorney for the estate will not assist you.
I have been teaching the system I do for many years and currently doing more direct working with my students from around the Country. Probate Attorneys can make or break your deal so you need to learn how to deal with them.
Another item I touched on I want to clarify is if your entering the probate real estate investing arena, secure yourself a good Probate Attorney who will work for you when you run up against an estate attorney who doesn't want to work with your deal. I usually have my offer signed by the executor (this is a skill I learned) then I have the contract delivered to the estate attorney with a one page letter on what I need done to close this escrow per the time line of the offer. I then place my Probate Attorneys' name and contact information and request the estate attorney to contact my attorney if there is any discussion which needs to be done. This usually sets the tone that I'm a player and the estate attorney usually does what we need. You need to think outside the box.
Probate Real Estate is a fascinating world and quite different from what the normal investor or agent knows. It has been earning me thousands over the last 20+ years. Now for my next 20, I will teach others what I have learned. If you have interest in what I do check...www.probate-realestate.com