Probate Real Estate Guide
Connect with motivated sellers that control real estate with plenty of equity
You have a great opportunity to help bereaved families navigate the complex probate real estate process, and to increase your revenue doing so.
What Are Probate Real Estate Leads?
First, let's define probate and probate real estate properties. Everything a person owns, including real estate, will go through probate if they pass away without a fully vested living trust.
Most people assume that just because the decedent had a will in place, the succession of assets and distributions is clear-cut. This is not the case at all.
If the decedent held assets such as real estate in their name, their estate will need to go through probate. Probate is a public process by which a decedent's estate is often liquidated to settle outstanding debts, pay beneficiaries and other creditors.
The executor / administrator, aka the personal representative (PR), files whatâs called âPetition for Probateâ at their local superior court in the county where the decedent last resided. The petition contains all you need to start prospecting: property address, the PR contact details, lawyer contact details and often a list of heirs.
What Makes Probate Real Estate Leads and Probate Real Estate Properties So Attractive?
Like we mentioned above, the best kinds of real estate leads are those where the seller is motivated to sell sooner rather than later. In a regular non-probate market, this usually means you have to predict major homeowner life transitions based on demographics. E.g. If someone has owned the property for 20+ years and had enough space to raise a family, you might approach the empty nesters from a downsizing angle, cashing out on equity, travelling, minimizing expenses etc. Again, in this regular non-probate situation, youâre guessing based on the demographics and data you can buy from your title company as you develop your farm.
When someone files for probate it is because they need to settle an estate sooner rather than later. Being in charge of an estate and managing the back-and-forth paperwork can be a full-time job in-and-of itself, and most PRs get overwhelmed. Most PRs have a full-time job, a life, and now find themselves in a situation they did not expect or desire. More importantly, almost all PRs are also beneficiaries, which means they stand to gain monetarily when all is said and done.
In short, probate real estate represents a compounding effect of motivation that can easily be detected by you, the agent and/or investor, if you know what to look for and where.
To summarize what makes a lead a great lead and why probate real estate leads qualify across all four major criteria:
- The property owner wants to sell asap
- The property owner is not staying in the home
- There are outside factors that apply greater pressure to sell
- Selling the property concludes a stressful and overwhelming period for the owner
Probate real estate leads meet all the criteria. When someone unexpectedly becomes a PR whether it be an executor or administrator, they quickly realize there is not enough money in the estate to settle all outstanding debts, hence motivating them to sell their real estate ASAP. The PR will most likely not be living at the property unless the PR is a spouse, in which case they may co-own the property in joint tenancy. Creditors, hospital bills, nagging heirs, taxes and court dates all contribute to the outside stressors making the PR want to settle this estate asap. Lastly, concluding the sale and settling the estate will put an end to this stressful situation and put the PR in a better position financially.
The Best Ways To Get Probate Real Estate Leads
Letâs examine the best ways to locate probate real estate leads. In general, probate information is public and available for free. The petition for probate gets filed at the county superior court and is given a case number and a filing date.
Here are some ways for you to get started:
To find cases online you first need a case number from your county. Next, you will need to search your county probate court for details and decide how you want to access the probate case details: online or in person. The process largely depend on how the court is set up. Some courts give you full access to case details online while others will give you enough initial details for you to get started, and you will eventually need to visit the courthouse to get the full case profile.
Here are your steps:
- Visit google to search âpublic notice to creditors.â You typically will find a local paper and/or local website that publishes notice to creditors, which is part of the probate process. You can also visit http://www.mypublicnotices.com... , select your state, then county and then search for âprobate.â
- Once you have a probate case number, youâll visit your local probate courthouse website. Simply search for â(county name and state) probate court.â E.g. for Clark County, Nevada I would search âClark County Nevada probate courtâ and Iâd find this site.
- Next youâd look up the case number you found in public notice ads and see how much information you can glean from whatâs available online.
- If you get all the case details you can begin prospecting immediately.
- If you donât get all the details, you can visit the courthouse and access case details in the probate clerk's office.
- Alternatively you can look up the decedent's property tax records and cross reference their possessions against and what remains to be sold.
Visit/Contact The Local Probate Court
If you can't find online probates in your county, consider visiting or contacting the local probate court. This can give you access to the available probates or force you to dig deeper, but again the process will depend on your county. Also, you'll likely be expected to pay for photocopy services.
Create Working Collaborations With Local Probate Lawyers or Estate Planning Lawyers
Befriending local probate lawyers or estate planning lawyers who handle several probates in the local country is another excellent way to find probate real estate leads. Public records help a lot, but it's also vital to get the inside scoop.
How To List Probate Real Estate Properties
Generally speaking, probate real estate is listed and sold just like any other real estate with the exception of a few additional pages to be signed, and proof the personal representative (PR) has the authority to sell the property.
A PR can sell directly to buyers and does not need to list with an agent. However, PRs have a fiduciary duty to maximize the value of the estate. Oftentimes, this means hiring an agent who is experienced in probate real estate, such as a certified probate real estate specialist (CPRES), who can attract as many buyers as possible and generate multiple offers.
Once a PR has received documentation from the courts appointing them as the person responsible for settling the estate, they can sign a listing agreement on behalf of the estate, thus securing a contract for the agent, protecting the agentâs commission and interest before they get to work marketing the property.
Depending on the state, some names given to a personal representative are:
Administrator - when there is no will in place
Executor - when there is a will in place
Executrix (female executor) - when there is a will in place
As mentioned earlier, the motivation to sell the property comes from the amount of money a PR stands to earn in the process, and more importantly, the amount of work, stress and pressure a PR may experience during this process that they want to end.
As a real estate agent or investor, your main concern is to help them get the highest amount for their property according to fair market value so the proceeds can go into the estate and help the PR settle accounts. The process of selling the real estate can take 1-3 months, whereas the entire probate process can take anywhere from 6-18 months. From the agents or investor perspective, theyâre in and out of the transaction within 1-3 months.
In some cases, this dictation means listing/trading the departed's property to clear debts or divide assets equally among successors.
At times you may find extreme motivation to sell, which means faster transactions below market price.
Note that this procedure may vary depending on the county or state. While networking with and approaching probate attorneys can benefit the agent or investor in the long run, keep in mind that the attorney works for the PR and the PR is the final decisionmaker when it comes to deciding on how to sell the property. Therefore, focus on working with the PR directly if you want results (listings / acquisitions) sooner.
Note that some states may require the court to approve the listing/selling after the executor accepts the offer.
This step is vital because it shows that the executors have fulfilled their "fiduciary duty" to the beneficiaries.
Using Direct Mail
One excellent way of approaching the estate's heirs or executors is via direct mail. After getting an update about their probate property, send your professional letter to their successors and the executor highlighting that you want to list or buy the home.
In some cases, agents can access the executor by sending the letter via their probate lawyer, highlighting why they need to use you to list the house for sale. Here, you can show off your years of experience in real estate, your history working in that local area, and your readiness to list the house.
Sending another letter to the departed's address is another strategy to consider. The deceased's family members are likely to collect and read their mail.
Regardless of who you mail and how often you mail out letters, remember that following up is the key to your success.
Now that you have a better understanding of probate real estate leads, why they work and how to find them, the next step is to decide if you want in.
You have options:
- Follow the steps we outline above and establish your own research process and team.
- Sign up for ProbateData and start prospecting today.
Obviously, we think you should try us out!