Should You Buy a Probate Property In Henderson NV and How it works
Con #1
• One of the first things to keep in mind is time frames. Buying a home in probate typically takes longer than purchasing one that is not. This is because the court must approve the sale. Time frames to get on the court calendar can range from 3 weeks to 4 months. During covid the courts were backed up and once an offer was accepted it would take months to obtain approval.
Con #2
• The Administrator of the Estate may be exempt from completing disclosures. In Nevada, the Nevada Revised Statues provides an exception from completing the Seller’s Real Property Disclosure for an administrator who takes temporary control of title to the property solely to facilitate the sale of the property on behalf of a person who is deceased. It is likely that the Administrator is not aware of defeats or the history of the home. Many times, they have never lived in the home. Sometimes, the home is sold AS IS. It is always a good idea to have a home inspection and make sure you are aware of any repairs that will be needed.
Con #3
• Another thing to keep in mind that isn’t discussed often, is that the deceased relative may have passed away in the property. I have had a handful of listings with the deceased passed away and the heirs did not find out for months. Hazmat was required for the home. In Nevada, the Seller is not required to disclose if someone passed away in the home unless the home caused the death. I recommend that buyers ask in writing if someone passed away in the property.
Pro #1
• So why would a buyer purchase a Probate property with these cons? Well, if you are looking to score a home for less than you would otherwise, purchasing a house at a reduced rate is common in probate homes. The big Pro for probate homes is the lower purchase price. As the homes require court approval some buyers will be scared off and not willing to deal with the extended time frames or risk. This brings less demand and competition for these types of properties. Also, the heirs maybe be motivated to see the home sell quickly and accept a lower price. Usually, they are not willing to do many improvements to the home so these properties can be purchased by investors who can remodel and sell at for profit.
Probate Buying Process Overview
• A probate home is a property that is part of an estate, typically one whose owner has died without leaving a will. Even if there is a will, in Nevada probate may be required to sell the home. The home then needs to go through a legal process known as probate. During this process, the court determines who should inherit the property and how it should be split up.
• A probate sale starts with the Court appointing an estate representative. Once the probate court has appointed an administrator the paperwork can be signed and the home listed for sale and the administrator can accept offers. Since they manage the estate, they’ll have to petition the court to seek permission to sell the probate property. Court approval may be required to approve the accepted offer, At the court hearing, the court will ask for open bids. Probate court is held on Friday mornings and there are generally investors at the hearing who will bid on these properties. It is recommended that you as the buyer be present to bid as well!
• The executor of a will is the person who is the personal representative responsible for carrying out the instructions in a person’s will. In Nevada, there are two types of executors:
1. An executor is generally appointed by the will and is someone named within the will.
2. An administrator is appointed by the probate court and must be a close relative or someone nominated to serve as guardian if there are minor children.
Tips for Potential Probate Property Buyers
• I recommend making the inspection contingency begin upon acceptance of the offer. Completing inspections right away will allow you to negotiate a credit or repairs prior to court approval.
• Write all other contingencies such as financing and appraisal to begin upon court approval. This way you are not paying for the appraisal or other items prior to approval.
