Many Real Estate Investors are hesitant to work with probate deals because it takes them out of their comfort zone. Some of these investors feel uncomfortable approaching families that have lost somebody close to them. Investors frequently wonder when the best time is to contact a seller for a probate property. There are many variables involved that can influence how you approach this type of deal because it can also take a fair bit of time. However, it all depends how you look at the situation because many argue that families selling real property need to sell. We're going to look at the best time to approach the seller and how it can be comfortable for everybody involved.
Probate is the process where the courts help to identify and settle the assets of a deceased person including real estate property. The process can be lengthy especially if things are unorganized and there is no will. If there isn't a will, the courts will often appoint an attorney as an administrator on behalf of the heirs unless a family member is an executor. There are probate attorneys that can work with the family members to help with the process. For example, an executor may bring on an attorney if they don't understand how things work with the courts or during complicated situations.
Probate deals are desirable for Real Estate Investors because the homes seldom have a mortgage and usually only require cosmetic repair. Additionally, the population is aging, and many people are entering into their 70s which will increase inventory in the marketplace. Also, family members are anxious to sell the real estate because the longer it sits, the more it costs the estate. While the home is going through the probate process expenses such as yard care and maintenance must be taken care of, which can add up quickly. A lot of times descendants need to sell because the estate owes money to creditors or they don't want the hassle of keeping the property and continuing to pay property tax. There are countless reasons why this is attractive to both the buyer and seller.
There are three favorite ways investors use to approach the seller in Probate. Some of these methods can allow you to reach out to the seller quite early in the process and possibly to solidify you as the go-to person when the property goes to probate.
The first way involves the investor doing their homework and going down to the courthouse on a monthly basis to compile a list of probate cases. Once the investor has their roster, they will take steps to reach out to the descendants usually by mail. This process can work well depending on the size of your area. For example, if you're working inside a small or medium size city, making a track downtown monthly might work well. However, in a large city with a large population, this process me prove inefficient.
The second way is for people to build a relationship well in advance adding people to a Client List. This method does work well and will allow you to reach out very early in the process. This technique involves compiling a names list of people interested in the process of probate ahead of time. This method consists of a bit of preparation and long-term vision, but can pay off making the process less uncomfortable. essentially your prospects already know who you are and probably like and trust you. They will most likely go with you over someone else. This style is also known as a newsletter style approach.
The Third Way is by far the most efficient allowing you to approach a probate situation In a highly favorable way. This method, when used correctly, will enable investors to close multiple properties inside of a year. As a whole, the strategy might seem complicated, but in fact, it's simple. The investor will go through their network of existing friends and family asking who their attorneys are. Once they establish who their attorney is, You’d ask for a referral to a specific probate attorney. This scenario provides a pretty solid networking connection. The probate attorney now has an investor that can help out when the attorney is handling difficult probate cases. Mainly, the investor is helping the attorney and the families who need to sell their home quickly. Not only that, the attorney understands every aspect of the particular probate case they're addressing, and nobody is left feeling awkward.
To conclude, Investors can make a profit if they plan ahead. There are three ways people usually use to reach out to probate sellers. You can do it in a way that doesn't make people uncomfortable.