Real estate investors need homes that sell below the market price to make a profit. While foreclosure and short sale properties offer potential profits, there’s tough competition for these properties, which usually drives the price up.
Probate real estate, while harder to locate, may offer a better deal and less competition. Many investors either don’t have the time or don’t want to be bothered with the hassle. It could be the trick you need to up your real estate investment game.
How To Find Probate Properties - Table of Contents
What are Probate Leads?
If you are an inexperienced real estate investor, the notion of buying a probate property may sound strange at first – you are asking grieving family members, sometimes even widows to sell you their home. But this is where you’ll find the deals and oftentimes, you’re doing the family or beneficiaries a favor. The best probate sales come from the following:
- Beneficiaries that want to sell the property fast for financial reasons
- Beneficiaries that don’t want the burden of the home as they have their own property
- Beneficiaries that live out of state
Think about it – a family member inherits a probate home that he or she didn’t expect. They already own a home three states over. Do they want the burden of maintaining the inherited home and dealing with renters? Chances are in your favor that the inheritor of the probate property doesn’t necessarily want the house and would be willing to sell quickly.
By offering to buy probate property in a respectful manner, you can potentially alleviate the administrative and tax burdens that can come into play when a home is inherited. Provided the new owner is open to the idea of selling the probate home, there is nothing unethical about this real estate investing strategy.
How Do You Find Probate Leads?
The probate process differs in each state and even each county, but certain strategies are useful no matter where you live.
Look Online To Find Probate Sales
Starting from the comfort of your own home may be easiest if it’s an option in your county. First, determine if your county lists probate records online. If they do, get familiar with your area’s obituaries. In the obituaries you can determine the name of the deceased and if there’s a living spouse. If not, it may be a listing you want to pursue.
You can either look up the deceased’s name in the probate records or look him/her up on your tax assessor’s website. You’ll know right away if the deceased owned property. You’ll have the necessary information to proceed with negotiating the probate process, if applicable.
Visit the Courthouse
If you aren’t lucky enough to have online probate listings in your area, you may have to visit the courthouse in person in order to view probate court records. Depending on your county’s resources, you may have to dig through records yourself or you may be lucky enough to have a clerk that has probate files ready for real estate investors just like you.
You effectively get the same information as if you looked online, but you have deal with the time-consuming process of digging through each probate record yourself. This step is more time consuming, but may yield great results.
Build a Network
If digging for your own information doesn’t sound appealing, start networking. Attend local networking events and introduce yourself to the local estate planning attorneys and probate lawyers. When networking, you want to ensure you get quality investment property information right from a good source.
The relationships won’t immediately turn into available properties, but you’ll start building the relationships that could lead to something in future. Life is unpredictable – you never know when a hot opportunity may cross your lap requiring you to act fast. Sometimes it’s more of who you know than what you know, especially in the real estate industry.
Follow Local Auctions
Many probate properties head to auction if there aren’t suitable offers beforehand. Get yourself familiar with the auctions in the area. You can do your own research to find them or buddy up with a local real estate agent that’s ‘in the know’ and can give you a head’s up when an auction is coming up.
If you end up in auction, know that the price may be higher than what you’d be able to get if negotiating individually as auction bidding often sends prices soaring.
Buy Probate Leads
Many companies offer online probate leads for a fee. Before you choose this method, know if your county offers the leads for free, especially online leads. This makes the most sense in areas where the probate records aren’t easily accessed online and require multiple steps to acquire them, including going to the courthouse in person.
Finding probate properties does take some creativity and time, but with the right steps, it can be a lucrative real estate investing strategy. Many family members just want the property off their hands and in today’s market, they may not want to sit on a property for months on end. It costs them money and uses up their most valuable resource – time.
Having probate leads helps you get your hands on the properties that may otherwise end up in foreclosure with much more competition than if you grabbed the property in its earliest stages.