Investing in Probate Real Estate
remarkably consistent, potentially very fruitful, and shockingly underutilized.
Probate refers to the process which occurs when property is left as
part of the estate of a deceased person, and those to whom the property
was bequeathed cannot or will not continue to make mortgage or tax payments.
This occurs with incredible frequency (nearly one fourth of all cases
seen in court in the United States deal with matters of probate), and
is extremely reliable—no matter what the market does, people will
always die. The government is more concerned with cutting losses
than with making huge profits, which means when property is seized by
probate, it is sold on the cheap!
For
whatever reason, you will not find a great deal of competition in the
probate real estate market (as opposed to foreclosure auctions for example,
which these days are beginning to bustle with the frenzied activity
of investors trying to capitalize from the slow economy). Perhaps
it is the nature of dealing with legal and financial matters with a
mourning family—no one wants to approach a grieving widow who can’t
make the payments on her dead husband’s home, and start a conversation
with, “Hey, I’ll give you 70% of market value for your house…â€.
It’s a very sensitive scenario, and many investors seem to simply
shy away from this great financial opportunity.
As
with all of these short sales and huge discounts, selling the property
is what’s best for everyone involved. If you perceive yourself
as ripping off a mourning family, and it is rubbing you the wrong way,
then remind yourself that by buying the home, you are relieving a struggling
family from an enormous financial burden, and you are assisting the
bank or government to regain a substantial portion of the money they
lost on a bad investment. If no one bought the home (even at such
a big discount), the bequeathed would be financially crippled, and the
financial institution would be stuck absorbing a huge loss. The
buyer is the savior in these situations.
Once
you’ve convinced yourself that this is a noble gesture, you will have
to approach whomever the property was left to when the probate opens
in court. The best approach in this situation tends to be making
a low cash offer, which will often work since the seller will probably
want to avoid the highly expensive cost of owning and maintaining a
property that is in all likelihood not even their home. Most of
the time, they will be much happier to just walk away with a stack of
cash. As you can imagine, there is not usually a great deal of
negotiating or competing with other buyers (which for you is a golden
ticket and gives you all the leverage). Think low, and remind
yourself that you are doing a service to all parties involved.
What do you think? J
Article Source: http://www.articlesGiant.com
Permission is granted to republish this article, free of charge, as long as embedded links remain in tact and articles are not changed, edited, or reworded.