In an article posted in the Real Estate weekly recently, it was explained that from time to time you can find a deal on a home that is part of an estate, but there are
particular conditions you should include in your offer.
First, what is probate?
In short, probate is the court procedure for 2 things: Official approval of the will by the court as the valid last will of the deceased; and an appointment of the person (or persons) who will act as the executor to the deceased's estate.
Essentially, it is the court process that gives the executor the authority to act on behalf of the deceased.
Special Subjects to Your Offer
In probate real estate purchases, because reaching probate does take some time, you can be hit with delays in the purchasing process. When you make an offer on a property under probate, you will have all your usual subjects as a buyer (inspection, finanancing and so on). However, you must also have a subject for the seller that reads:
'Subject to the seller receiving the follow by a (subject date):
1 a copy of the grant of probate or letters of administration that allow the property to be sold; and
2 assurance that everyone entitled to claim under the Wills, Estates and Succession Act have waived or released their claims against the property. This condition is for the sole benefit of the seller'
To make sure an offer does not collapse if probate is not granted by the time you have reached the subject date, you may want to add an automatic extension of the subject. This way you are covered if probate has not been granted by your subject date and you will not have to get everyone to sign an addendum.
You may also want to add an additional clause about extending the closing date if probate is delayed. It will read: 'If probate has not been granted by the closing date, the closing date will automatically be extended 15 busines days after probate is granted.'
Typically you will want to make this subject to probate date 2 to 3 months away.
What Happens Next?
Once an accepted offer is handed in to the party in charge of probate, they will expedite the file. Which means, it goes from the bottom of the pile of documents to the top at the lawyers office.
Once the buyer has removed their subjects the property is technichally sold. Unless something very unforeseen happens during the time the lawyers are granting probate, the property will sell. However, until the seller (the executor) removes their subject to probate, the listing will stay active. This means that, despite all the listing agent's attempts to communicate that the propery is technically sold, they will still be inundated with calls and inquires about the listing.
When it comes to a probate sale, it would be wise to hire an agent who has some expertise in this area, as there are many things that they know, where others may not.