Estate Sales and Probate
Most people have seen signs for estate sales while driving or walking but you may be unsure on what it actually is. An estate sale is the liquidation of a property and all of the items inside of it. Sometimes, you may hear an estate sale be called by another name such as a liquidation sale, a tag sale or an estate liquidation. The goal of an estate sale is to sell all of the items in as quickly as possible.
How Do Estate Sales Work?
Before the estate sale, all of the items in the home will be organized and given a price tag. It’s common to find items for a cheaper price at estate sales. In addition to physical signs, the sale may also be advertised in the newspaper and online as well. The sale will take place at the home and is open to the public. Estate sales will usually take place over one or two weekends depending on the size of the property and how many items are for sale.
Sometimes the actual property or estate may also be for sale. It is common that these properties are sold “as is”. This means that the seller will not be making any updates or repairs to the home before selling and the buyer agrees to take the home in the condition as it is.
Why Do People Have Estate Sales?
Usually, an estate sale occurs after the owner of the property has passed away. If the inheritors of the property do not want it, they may decide to hold an estate sale. They will then receive the proceeds made from the sale. Sometimes, a person may specify in their will that they want all of their items sold through an estate sale.
However, there are numerous other reasons why someone may have an estate sale including downsizing, divorce, relocation, or bankruptcy.
- Downsizing: Downsizing is another common reason as to why a person may hold an estate sale. For example, if someone is moving from a 3,500 sqft house to a 1,200 sqft house, they may not have room for all of their furniture. An estate sale is a quick way to get rid of all their unneeded items.
- Divorce or separation: During a divorce or separation, the couple must decide on how they will divvy up their shared property. This can be a long, drawn-out process due to personal attachment. Instead, they could have an estate sale for their shared assets and split the profits.
- Relocation: Moving long-distance can be extremely expensive, especially if you have a lot of large furniture. Furthermore, if you are moving to a different country, it can be almost impossible to bring your things. This would be a great reason to host an estate sale.
- Bankruptcy: If someone is bankrupt or in debt, they may need to quickly liquidate their assets. An estate sale is a quick and efficient way to do this.
What is a Probate Sale?
In certain circumstances, someone may pass away without first specifying their heirs. A probate sale takes place when a deceased person does not have a will. Any property they own will then be put up for sale by a court-appointed representative. Other names for the court-appointed representative are an estate representative, an executor or an administrator.
The proceeds of the sale are used to pay off any debt the deceased may have and the rest is given to family members. The court follows a specific set of rules to try to get the highest price for the home. However, probate laws can vary from state to state.
The Probate Sale Process
- Appoint Estate Representative: First, the court will appoint an estate representative to handle the sale of the home. The executor can hire a realtor to help market and sell the home.
- Get Home Appraisal: Next, the estate representative will hire an appraiser to find out what the home is worth. An appraisal is important to make sure the home is listed for the right price.
- Market The Property: A realtor will then market the property. This will be done like a traditional home sale. The realtor may hold open houses or put the property on MLS.
- Make/Receive Offers: Buyers must make offers with at least a 10% deposit to be considered.
- Petition Court: After an offer is accepted, a date will be set to petition the offer to the court. Usually, this will be 30 to 45 days after the estate representative has accepted the offer. It’s important to note that the home will still be on the market and other offers can still be accepted.
- Court Approval: At this time, all of the buyers with accepted offers will participate in an auction at the court.
- Make Deposit: The winning bidder must provide a deposit of 10% to the court.
- Signing of the Contract: A contract will be signed between the buyer and executor.
- Closing: After the contract is signed, the buyer will close on the home. This will usually be 15 days after the signing but it can vary.
Pros and Cons of Probate Sales
Probate sales are usually a great way to get a deal on a home. This is because they are typically listed below market value. If you’re an investor that flips houses, a probate sale may be the way to go. However, probate sales also have drawbacks. First, the homes are sold in as-is condition. It’s important to get an inspection if you are interested in a probate home. Another downside of probate sales is that the process can be very long. It’s normal for the process to take months and sometimes even years.
Settling the estate of a loved one is never easy. It can be emotional, overwhelming, time-consuming, and downright complicated — which is why you need an experienced professional to help you make rational and beneficial decisions.
We at the Faruqi Team have 30-years of experience in helping families sort out any issues regarding real estate that a loved one has left behind. We do it with care and compassion, and focus on getting you the maximum return in the least amount of time possible… Which can take a lot of weight off of your shoulders during this trying time. If you have any questions about estate sales and probate, feel free to contact us today!
Whether you use our services or not, we invite you to browse our extensive list of Frequently Asked Questions, which can help guide you towards making positive decisions regarding your loved-ones estate.
Services we offer:
We offer a full range of services including:
- Haul away service
- Estate liquidation
- Cleaning and housekeeping
- As a Certified Property Manager, we can assist you and your attorney with eviction if needed
- Handy work, plumbing, and electrical work
- Title clearance
FREE APPRAISAL: We can offer an accurate bank appraisal