If you’ve been looking at real estate to buy for investment purposes, you’ve more than likely come across probate sales.
Usually, a property is sold in court when a person dies intestate or without specifically designating heirs of the property. While the court wants to ensure the property is sold at the best price and that certain legally prescribed steps are strictly followed, there are still some definite pros of buying probate property in Chicago.
3 Pros of Buying Probate Property in Chicago
1. Priced to Sell
For whatever reason – wrongly thinking the inevitable is many years in the future, fear of facing mortality, or just plain old procrastination – many people who own property die intestate (without a will in place). In these cases, the property usually goes through probate court for sale. And while the court wants to sell it at the best price possible, that price is still usually below market value. In most states, probate courts require a sale price of only 90% of the appraised value.
Another factor that often makes probate property a bargain is a simple fact that heirs and executors are most often real estate amateurs. They don’t know how to drive the hard bargain and all the techniques and strategies of negotiating. In addition, they must just want to sell off the property as quickly and painlessly as possible in order to settle the deceased’s debts.
2. Motivated Sellers
Another of the pros of buying probate property in Chicago is the fact that heirs are usually motivated sellers. And where you find a motivated seller, you also often find a good price.
Oftentimes, heirs consider an inherited house nothing more than a burden because they already own their own home. An executor may also need to sell the property fast to avoid having to spend estate money on repairs or more taxes or even to raise funds to pay off the decedent’s debts.
And here’s another thing to consider. An executor may actually want to sell the property at a low price in order to avoid capital gains taxes.
Another possibility is to wait till title to the probate property is distributed to the heirs. A lot of times the heirs don’t want the property or don’t want to own it jointly and so are willing to sell at a fairly low price.
3. Entry Point for Flipping
The first two pros of buying probate property in Chicago lead inevitably to this third one. And it is that buying probate property in Chicago is an affordable way to get into real estate investing, especially house flipping. Buying probate property allows you to affordably start and build a real estate business.
If you’re willing to wait it out through the legally mandated period and jump through all the other legal hoops, you can purchase probate properties at very reasonable prices. And these low sale prices afford the potential for substantial profits. If everything goes right, all you have to do is make a few repairs, resell the property at a higher price, and then count your profits.
These 3 pros of buying probate property in Chicago can make it look pretty attractive for both investors and even those seeking a home to live in. And it can be a good investment – if, that is, you have the know-how and just a little assistance from an expert or two. We are ready to help you achieve your goals.