Not only do hundreds of thousands (or perhaps millions) of homes pass through probate each year, but investors are drawn to them. They appeal to real estate agents and buyers because there may be little or no competition around acquiring them. During a time when open houses come equipped with long lines of buyers willing to make cash offers and forego home inspections, the lack of competition may seem like an appealing offer (as a side note, we strongly recommend you speak to a real estate attorney about the risks of not getting a home inspection if you are inclined to do so).
Additionally, you may be eager to sell the home because you want to avoid making the mortgage payments on a house you no longer want. For buyers, this means getting a home under market value. However, can you sell a home while it’s in probate? Does Illinois allow homebuyers to purchase them?
Is It Possible?
Probate laws differ by state, but in Illinois, it is possible to buy a home that is in probate. You will need to accept that this transaction will be very different from previous real estate purchases. The court will supervise the sale of the home, and the estate executor will also be involved.
What the Process Looks Like
Although having a real estate attorney assist with this is critical, we do want to go over what the process will look like. Because the home wasn’t listed traditionally, the executor needs to have the home appraised. Is it possible for two appraisers to come up with different values? Absolutely. That said, the court will ensure the house sells for close to the appraised value (at least 90%). Should the appraiser over-value the home, a buyer will be forced to pay close to what it is valued at. You will likely miss out on more potential buyers if it’s too high.
Generally, the next step will be to list the house. When real estate agents bring their clients to the home, they know the house is in probate. Making an offer requires the buyers to put 10% down as a deposit. The offer will go to the estate’s executor, and they will discuss it with the heir(s) of the home. The executor will likely have a probate attorney assisting them as well. If the heirs accept the offer, it is next up to the court to approve it.
If the offer is approved, then there will be a Notice of Proposed Action sent to anyone who has an interest in the house (i.e., the beneficiaries). They will have time to review the offer again and will have another chance to object to the sale of the home formally.
Speak To An Illinois Real Estate Attorney Today!
We chose to speak about this process because it highlights the importance of having legal counsel during a real estate transaction. Your attorney is there to protect you and your interests, read through and explain the countless pages you must sign at closing, and help you navigate the challenges you will face along the way. Contact Auricchio Law Offices to schedule a free consultation before you embark on your next real estate venture.
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