Probate properties are owned by the estate of a deceased homeowner and are often sold below market value to property investors and potential homebuyers. Have you considered buying a probate property in CO? Probate properties might seem like a lucrative investment, however, there are some cons of buying probate property you need to be aware of before you make your purchase.
This blog will tell you what you need to be aware of when investing in a CO probate property.
It’s A Lengthy Sales Process
After identifying a probate property in which you are interested, you should be prepared for a potentially long process. Generally, purchasing a probate property takes at least six months and could take much longer. If you have a hard timeline for moving into a property, it may be better not to purchase a probate property. In fact the process of a home being sold through a probate court can take months, even years. Typically, there are many parties involved in the sale which inevitably leads to complications and delays.
You will be dealing with lots of red-tape from the probate courts and attorneys. In addition, you might be waiting on heirs who may not agree about what to do with the property, what to sell it for, etc.
Disagreements may arise, slowing down the process while the courts attempt to figure everything out. If the deceased party had financial debts and obligations, those must be settled as well, adding more time to the lengthy process.
10% Non-Refundable Downpayment
When you make an offer, you must also give a deposit of 10% of the offer price. The representative of the estate may accept or give a counter offer. Even if your offer is accepted, it is only a provisional acceptance until the probate court confirms the offer. If you are overbid or the court does not confirm you as the buyer, you should be able to get your 10% deposit refunded to you. If you choose not to move forward with the purchase on your own, you will lose your 10% deposit. If you are approved as the buyer, your deposit will go towards the purchase of the property.
Upgrade & Repair Costs Can Eat Up Your Profits
If your offer is accepted, you should request to have a home inspection. Most often, family members selling a property do not know all of the problems with the property. By having the home inspected, you get a better understanding of the potential problems with the home and whether the value of the home is less than you originally anticipated.
It is important to note that some sellers may refuse an inspection and that probate property sales are “as is.” This means that you are purchasing the home in its current condition without any warranties from the seller.
If the inspection uncovers that the home is in utter disrepair and needs a significant investment to make the home livable, you will have to decide what is in your best interest.
Remember, if you withdraw your offer you will lose your deposit.
Make sure the structure of the home is sound and plumbing and electrical systems have been maintained. If there are many fixes and upgrades for you to contend with, you might want to rethink what you want to offer for the property.
In Conclusion…
Investing in a probate property can be a great investment as long as you know what to watch out for. As with any type of real estate investment, there are definite perks, however, make sure you are aware of the cons of buying probate property in CO before you make your investment.
Do you want to learn more about the pros and cons of buying property in CO? We can help you navigate the world of probate investing. Click here to fill out the form, or call our office now at (970) 744-4944.
Whether you are looking to buy or sell a probate property in Fort Collins, , NoCo House Buyers Inc is here to guide you through the process! Give our office a call today!