Are you thinking of Buying an Estate Sale? Not quite sure what this means? How this type of sale would work? Or if this is a good investment option? Then you have come to the right place!
What is an Estate Sale?
When a person who owns property in BC passes away there are a couple of things that need to be determined. Are they the sole owner of the property? How is the property registered?
If there are multiple owners and they are Joint Tenants, a death certificate can be filed with The Land Title Office to remove the deceased owner from title. The surviving owner would then be the sole owner and can sell and or refinance the property as normal.
If the deceased is the sole owner, or the property is registered as Tenancy in Common, then, their will must be reviewed. This will determine who the Executor is, and who the property is intended to be left to. The executor will need to apply to the Supreme Court of BC for probate to be granted.
What is Probate?
Probate is a court procedure. It is where the courts approve a deceased person’s will as being their valid final will. The courts will also appoint the executor of the estate. The Executor will have authority to act on behalf of the deceased. The property will go from being in the deceased’s name into the name of the estate. Once this is done, the executor can transfer the property into the beneficiary’s name or sell it. The probate process can take up to 6-months and much longer during times like COVID-19 when courts are not open or operating at full capacity.
What you Need to Know About Buying an Estate Sale
Although properties are often listed for sale prior to probate being granted they cannot be legally transferred into a Buyer’s name until probate is granted. Which means as a buyer you would write your offer with all the normal subjects (financing, inspection etc.) and have a subject to probate clause which is in the benefit of the Seller. The buyer would remove their subjects and then wait upwards of 6-months for probate to come through. However, once the Buyer removes their subjects the property is technically sold, unless something unforeseen happens. The property will remain as an active listing on MLS until the subject to probate clause is removed.
Is Buying an Estate Sale a Good Investment?
If you are looking for a quick completion, estate sales are definitely not the option for you. But if time is not a huge concern, an estate sale could be a good option. With there being fewer buyers for these properties the executor may be willing to let go of the property at a slightly lower price than a traditional seller would.
In a hot real estate market where properties are selling quickly, and prices are on the rise estate sales can become quite lucrative. You can end up seeing increases in the homes value prior to even completing on it. Alternatively, in slower markets it is possible to see properties decrease in value by the time probate is granted.
So, if you are thinking of purchasing an estate sale it is very important to get in touch with Your Two Awesome Realtors today to see how the real estate market is currently preforming and to get a better idea of how the market will perform over the next 6-12 months.
