If you are trying to make a profit in the business of foreclosures, you have probably found out how hard it is. It seems as if the market is flooded with people who are working to get a piece of that market. In many areas, this task is almost impossible, even for the most hard-working.
When you work in foreclosures, you often have to deal with sellers who are desperately unhappy. They do not really want to sell to you, and may view you as a vulture, preying upon their misery in a time when they are losing property they may still want.
The people in foreclosure are often losing their homes, the very roof over their heads. Can we blame them if they sometimes get irritated or downright nasty during the proceedings?
In probate, the situation is very different. The sellers in probate are usually eager to sell, and the house in question is probably not their primary residence. You are dealing with people who are motivated to sell and to be cooperative, not highly stressed people just trying to “get through” a bad time in their lives. It makes a huge difference in the way they will deal with you.
Many heirs are actually very eager to sell to you so they can quickly settle the estate. A friend of mine recently lost his mother and he inherited her house. During the next few weeks, he was required to travel back and forth, about 50 miles each way, to deal with the various legalities and hassles of property ownership.
My friend confided in me that if someone would just offer him a reasonable price for the house, he would probably take it. He even said that he would not dicker too much over the offer, because he would just want to complete the deal quickly and easily and liquidate the asset.
When someone you love dies, you not only inherit all of their property, but also all of their problems too. No one who is going through the grieving process for a loved one wants to take on a very large project at the same time. If you can offer these people a simple and fast solution of “What to do with Mother’s house,” they will take it, so probate is ideal.
Also, often after the estate goes through probate, several siblings or relatives will inherit jointly, which can cause all types of problems. Maybe the siblings live in different places or do not get along. Getting rid of property you own but do not live close to is sometimes difficult.
In most of these types of cases, none of the parties involved want the property, so they don’t want to buy each other out. Instead, they just want to split the money from the sale of the property. This fact is especially true if there are outstanding debts against the property, and also if they are going to have to pay a lot of inheritance tax on it, but can’t actually get at any cash. This is where you can step in to supply the heirs with a solution to what can be a difficult problem.
Another factor can come into play with this situation. Many senior citizens, 65 years or older, defer their property taxes until after their death in what is called a “senior deferral.” Once the senior citizen passes away, these taxes come due.
If the heirs to the estate inherit the property, they also inherit the past due taxes. Most people just want to get these taxes paid as quickly as possible, so that they can pay them and any other outstanding debts to the estate, and then see what is left over. They are eager to sell and resolve the matter, and pay off the hefty tax bill.
In conclusion, probate is better that foreclosure. The market is easier to work in because fewer people are buying in the probate market, and the sellers are more eager to sell to you. It’s much better to buy from people who are looking at you as a hero rather than a vulture swooping down to pick over their carcass and rob them of their home.