In today’s market, the estate sale remains a viable option for getting a home at a reduced price but it is not without its own unique set of challenges. Instead of making an offer to a single buyer, it must be vetted through a trust that includes family members who must agree.
Often, the owner has recently died or has been transitioned into an elder care facility. Emotions run high and, if the heirs can’t agree, they will turn to the court to sanction a sale and further delays will ensue. The heirs also may be in mourning — so patience is key for the buyer in this scenario.
“The size of the estate doesn’t matter,” said probate lawyer Shelby Hamilton who has handled a number of estate sales in the District and Maryland.
“It’s an emotional time. Sometimes people disagree when there’s not much to fight over. Other times they work beautifully together.”
When making an offer, the buyer needs to be careful not to rankle the heirs with a low price. Chances are, an appraiser has been called in and the property is priced to sell. Many times these properties are in need of updates and repairs.
“A buyer should not expect the heirs [who may live far away] to pay for or oversee any necessary repairs to the estate property,” said Brian Block of Re/Max.
“The flip side is that estate sales can often be bought at a good price. Since the heir(s) may not want to continue to pay property taxes and maintenance, it’s usually in their interest to effectuate the sale quickly.”
Investors such as Butch Settles of Petworth Investments spend entire days trolling around the District and Maryland for estate properties to rehab and flip. He comes in with a checkbook, ready to put cash on the table.
“We solve problems,” said Settles, who has purchased more than 75 estate properties in the area. “The bank doesn’t need to approve any loan. There’s no appraisal or home inspection, no termite or radon inspection. We wade through the mud. We’re going to gut it and start all over anyway — we’ll even get the crack addicts out.”
Investors may be the best way to go for estate properties in “as is” condition, but they are not always well received.
“The personal representative of the family has a fiduciary responsibility to act in the best interest of the estate,” said Hamilton.
“I would never encourage a client to go that route. It’s not prudent. Investors are trying to get it as cheaply as they can.”
