The probate process is a great way to invest in real estate. Whether you’re looking for your next family home or you’re hoping that you’ll be able to invest in a little real estate yourself, probate properties can be a goldmine if you have the right probate real estate agent and/or you know a great trust attorney. In simple terms, here’s what you can expect when you go in to overbid on a California probate property.
1. Consult with a Probate Real Estate Agent
For the best tips on great probate housing you should look no further than a probate real estate agent. The probate process is complex and adheres to a rigid schedule. If you want to get a head start on shopping for probate homes your best bet will be to let a probate real estate broker know that you’re interested. If you’re open to overbidding you can expect a call from every trust attorney Contra Costa county has to offer. Overbids are the best way for heirs to make more money from a probate sale, so interested over bidders are in high demand.
2. View Properties and Be on the Lookout for Overbid Leads
You should keep the local paper coming in. Typically, houses available for overbid will be listed there. By law, the sale must be listed in the local paper. If you’re not used to having it delivered, consider starting for at least as long as you’re looking for probate real estate to buy. If you’re also in contact with probate real estate agents you shouldn’t have a hard time being notified of available properties, taking a tour, and so on. Even if the probate process has proceeded to the point where you can only get the house through an overbid it should still be open for viewing. Make an appointment and investigate the house thoroughly. One important thing to remember at this point is that these houses are sold “as-is”. This means that you cannot expect anything from the current owners; not a retrofit, not termite clearance, and not even a fresh coat of paint. Factor in the repairs and sprucing up that you’re going to have to do when you’re thinking about how much you’d like to pay.
3. Get a Cashier’s Check for the Proper Amount
The actual overbidding process is tricky. The first thing that you’re going to need is a good bit of capitol. If you want to overbid you must arrive at the courthouse with a cashier’s check in the amount 10% of the minimum overbid. Make sure that you double check your math, however, because the minimum overbid is set by a simple equation. Starting with 10% of the first $10,000 and then adding 5% of the remaining balance of the current accepted offer, you get the minimum starting overbid. To put this into concrete terms, say there was a property with an accepted bid of $180,000. To figure out the legal minimum overbid, you would take 10% of the first $10,000 (which comes to $1,000) and then take 5% of the remaining 170,000, which is $8,500. Together, that makes $9,500, making the legal minimum overbid on the property $189,500. You have to have a cashier’s check for a 10% deposit of that amount. So, for a cashier’s check of $18,950 you can bid on the property in question. From that starting point the judge will determine the minimum increment bid on the house, and you could find yourself competing with one or more other buyers interested in taking the property off the owner’s hands.
4.Select the Highest You Will Bid at Auction
One thing to keep in mind is that it’s easy to get carried away in an auction setting. Before you arrive, make sure that you know what your “walk away” amount will be. Especially when you’re dealing in probate real estate, another house will come along or another investment opportunity will crop up. Just keep in touch with your Contra Costa County trust attorney and probate real estate broker and you’ll find another place.