There are many benefits to buying a home from an estate. The personal representative conducting the transaction will likely have less of an emotional attachment to the property than someone who lives there full-time. There is often pressure to complete a sale as quickly as possible, as homes that sit vacant begin to rapidly lose value.
Sometimes, buyers can obtain a house full of appliances and possibly even furniture at no extra cost when buying a home from an estate. They also don’t need to worry about the seller refusing to vacate the property by their possession date. Many people can find homes in need of modernization and repairs previously owned by older adults for a very competitive price. However, buyers, especially those coming to the table with a cash offer, should be aware of the one significant risk that comes with buying properties from an estate.
There could be title issues in the future
In theory, the personal representative of someone’s estate has the legal authority to sell property and distribute the proceeds of those sales in accordance with state law or the decedent’s wishes. In the real world, people sometimes make mistakes during estate administration that can cause complications for others.
If a personal representative of the estate cannot locate heirs or beneficiaries, those individuals may not be able to receive their inheritance. Particularly in scenarios involving intestate succession where someone dies without a will, beneficiaries not identified by the courts or the personal representative could take issue with what happened to certain assets after estate administration.
Additionally, if the decedent left instructions providing certain beneficiaries with the right of first refusal or held title jointly with another person, the possibility of a future title issue is hard to overlook. Those making an offer on a home sold during probate proceedings may need to inquire about the details of the estate’s status to more effectively protect themselves.
A thorough title review and a title insurance policy can also be key forms of protection in case someone comes forward with a claim in the future. Recognizing that different types of real estate transactions create different challenges – and seeking legal guidance accordingly – may benefit those looking to purchase real property in the near future.