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Whether an estate goes through New Hampshire probate or Arizona probate, a probate sale may be part of the process. You might have heard of probate sales but not know exactly how they work. This post answers common questions about them, including “What items are sold at probate sales?” “What is the probate sale process?” and “Are probate sales cash-only transactions?”
What Are Probate Sales?
When someone dies, their affairs must be resolved through a legal procedure known as probate. The probate process sometimes requires a probate sale to liquidate personal assets to settle the deceased person’s obligations. Probate sales are often necessary in the following situations:
- The decedent left no will
- The will’s terms are unclear or disputed
- The estate must sell assets to pay off debts
- The estate must sell assets to distribute the proceeds among heirs
The court supervises probate sales to ensure a fair and organized distribution of property. However, the estate’s personal representative typically manages the sale. If a will is present, it usually names an executor to administer the estate. Otherwise, the court will appoint a representative.
What Items Are Available at Probate Sales?
The assets sold in probate sales are as varied as the individuals themselves. However, the following categories represent items commonly found in probate sales:
- Real estate: For some people, ”probate sales” are synonymous with sales of real estate owned by a recently deceased person. Although probate sales can include other possessions, real property often represents a significant part of a probate sale.
- Motor vehicles: Other potentially valuable items at probate sales are cars, trucks, motorcycles, boats, and other vehicles.
- Personal property: Although some belongings are worth nothing monetarily, others have market value. Valuable personal possessions may include furniture, jewelry, electronics, and clothing.
- Art and collectibles: Another potential source of estate funds is the sale of antiques, art, and collectibles owned by the decedent.
- Business interests: Finally, a probate sale may liquidate part or all of the decedent’s business interests to settle the estate.
What Is the Probate Sale Process?
As court-run proceedings, probate sales must adhere to established legal rules and requirements. For example, real estate probate sales typically include the following steps:
- Court approval: The estate representative petitions the probate court, requesting permission to sell the building and/or land.
- Property appraisal: An independent appraiser determines the real estate’s market value.
- Listing and showing: The personal representative works with a real estate agent to list, market, and show the property.
- Confirmation hearing: After the estate receives an offer, the probate court must confirm the sale. This generally involves a hearing that allows other buyers to submit higher bids and ensures the sale is fair to creditors and beneficiaries.
- Distribution of proceeds: Once the court approves the sale, the representative will begin the closing process, pay off any outstanding liabilities, and distribute the remaining proceeds to heirs.
Because the court oversees the procedure, probate sales take much longer than typical real estate transactions. If any heir objects to the sale, it may further delay the closing. A traditional sale might only take one to two months, but a probate sale could take six months to a year.
Are Probate Sales Cash Only?
Now to the question at hand: Are probate sales cash-only transactions? While some probate sales permit other payment forms, cash offers are often preferred. Due to the strict legal requirements, probate sales are more rigid. Offers are typically non-contingent, which means the buyer cannot back out if they don’t receive financing.
While this appeals to sellers, it can be challenging for non-cash buyers. Lenders are less likely to approve mortgages for purchasers of probate properties. The property may be in poor condition, the sale process may be lengthy, and the final sale price may be uncertain. Cash offers eliminate these lending challenges.
In addition, probate sales often use auction-style bidding where cash buyers hold a distinct advantage. Finally, buyers usually must put down a non-refundable 10% deposit on probate properties in the form of a cashier’s check. This means even if they take advantage of available financing options, they must pay a significant portion in cash.
Are Probate Sales Always Necessary?
While the court may determine that a probate sale is necessary, they are not required for every estate. For example, if the decedent had enough liquid assets to settle debts, the estate might not need to sell any property.
The court also has a say in which assets are sold. For example, a judge could decide that selling a home is not in the estate’s interest. If the personal representative cannot fetch a fair price for the real estate, or if the will specifies that the home must go to an heir, they might have to create liquid assets elsewhere.
Need Financial Relief During Probate? Contact Us Today
Probate is often a time-consuming process. When it requires selling probate real estate, it could take even longer. As you wait for your inheritance to come through, you may have trouble making ends meet.
Rockpoint Probate Funding offers cash advances on pending inheritances, providing heirs with much-needed financial relief. If approved, you will receive your funds quickly and can use them for whatever you need. And because we provide non-recourse funding, you owe us nothing if your inheritance never materializes.
Now that we’ve answered your question, “Are probate sales cash only?” Rockpoint Probate Funding is standing by to answer your questions. Call (888) 263-8588 today or contact us online for a free evaluation.
