In California, as I mentioned there are two ways to sell real estate out of Probate.
As a Probate Agent in California you must know all the rules and regulations if you are going to represent a buyer or seller so you can make it to a successful close. This information is hard to find and I learned it all buy going to the School of Hard Knocks over the years (30+) and developing my system each time I sold or listed a probate. Most of our fellow agents don't have a clue how Probate Real Estate works and even more so how you can make it work for you.
This is truly a Six Figure Opportunity but very few have jumped on the band wagon. One issue you must understand is the appraisal process in a probate sale.
First of all, it's a joke.
The court appoints a Court Referee (Appraiser) who is usually not a certified appraiser but a accountant and they are paid peanuts to do the appraisal. What they do is a drive by appraisal then order comps. They don't go inside which means they can miss important amenities or problems which need to be reflected in the appraised value.
The appraisal is really only needed to account for the asset as the entire assets of the estate must be calculated so fee's and taxes can be charge. It really doesn't matter if the house is standing there valued at $300k or if there is cash from a sale during the probate. Also the fee's is based on the entire assets but not less the liabilities so if a house is worth $300K and the deceased owed $200K the fee's(attorneys fee) is based on the $300K not on the less than $100k net the estate really has.
WHAT A CROC!
So I often explain this to the estate that if they are going to sell the property at some point do it now during the probate process so the exact true dollar value of the assets will be assessed not the inflated value.
Where the appraisal would be needed is if you sell or list a probate and it goes through the old court confirmation process then you will need the appraisal as there is what is called the "90 Percent Rule" and as a Probate Agent, if you are representing investors this will kill your deals. This rule states an executor cannot sell the Probate Real Estate for less than 90% of the court appraisal. Add to this most court referee appraisals are usually high by 5% or more so this 90% rule is ok for most end user buyers moving in but not for investors. This is another reason most buyers stay away form Probate Real Estate.
When we purchase a probate for my investor clients or end user buyer I always demand the sale goes through the IAEA so we bypass the court confirmation process and court appraisal. Now I can sell the property at any price which makes sense for both buyer and seller and can be based on true value of the Probate Estate.
Many times a court appraisal on the estate home has already been done by the time I'm making an offer and I have to deal with it even though the process I'm going through doesn't require the appraisal. This is because the attorneys will want to use the appraisal to keep any possible problems of allowing the estate to sell to cheap come back on them. Again, I have a way around this and works like a charm but you must understand the entire process and how to make it work for you. Yes it takes some effort but if adding Six Figures per year to your real estate business doesn't excite you then it is what it is.
As a Probate Agent representing the Estate (listing) or (buyer) it is your right to challenge the court appraisal and I have done this on several occasions and actually had the appraisal reduced by the court referee. This takes special knowledge on how to do but again it's what being a Probate Agent is all about. I am not an order taker, given probate listings from a college buddy estate attorney but a professional who understands the laws and how to use them to my advantage but at the same time bringing better service and guidance to the estate or buyer so it ends up a win/win for everyone.
If you want to know more on what I do and how you can receive more information go to my sitehttp://dfprobatesystem.com
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