When someone inherits a home or another piece of real estate, they sometimes won’t want to keep the property. Instead, they may look to sell the property through an estate sale.
For homebuyers, an estate sale may provide a buying opportunity. Be warned, however, that the process of buying real estate from an estate sale is different than your typical home purchase.
Part of the reason buying a house from an estate sale can be more complex is that you’re conducting a transaction with a legal entity—an estate—rather than a person. Another factor that can increase the legal complexities of the transaction is that multiple parties may need to agree to any sale.
If you’re looking at purchasing a home that’s being sold through an estate plan, ask yourself these questions to help you evaluate whether the property is worth pursuing.
What is the state of the property?
A property being sold at an estate sale may have a price that looks like a bargain. If the price of the home seems too good to be true, it probably is. Sometimes, these houses are sold at a steep discount because regular maintenance was ignored by the previous owners. It’s important to do your due diligence on the property before buying as properties are typically sold on an "as-is" basis at an estate sale.
Who is legally allowed to sell the property?
If the deceased owner of the property had a will, there should be an executor named. That person is the one legally authorized to conduct the sale of the property. In other instances, the house may have been placed inside of the trust. A trustee would be the person authorized to sell the property.
Is the property going through probate?
When a homeowner dies with a complete estate plan in place, the property may ultimately end up going through probate. Probate is the process of transferring the deceased’s assets under supervision of the court. If the home you’re looking to buy is subject to probate, finalizing the sale can take a long time.
The housing market in the greater Philadelphia area continues to be competitive. Because of this, some people are looking to an estate sale as a means of finding the right home. Buying a house from an estate sale can be a good idea, but buyers should know what’s in store for them.