Working in real estate has been one of the most rewarding things I’ve done. It’s a fun business too, but it’s not without its challenges and adrenaline rushes. Overcoming these moments alongside my clients is what allows me to grow deep relationships with them. All transactions are unique, some have small issues, others huge problems. Probate deals are an interesting animal – you’ve got to contend with probate court, attorneys, sometimes fiduciaries and quite often family conflict.

A few years back I was contacted by an attorney at one of the top estate planning and probate law firms in San Diego. She said, “I’ve got a probate referral for you!” I thanked her; but she responded, “Don’t thank me yet, this deal has a lot of hair on it, and I won’t be offended nor think less of you if you don’t want to take it on” I was immediately intrigued – “What could possibly be wrong with this deal, that the attorney is giving me an option to turn down the business?”  She went to explain that the subject property had been overrun by the tenants and were now squatting.

The squatters had converted it into a drug “crash pad” and there was much illicit activity coming out of the place. Additionally, they had a hoarding problem and there was junk all over the front and back yards. The city had come down hard on this property and the city attorney’s office was eager to get these people out! There was a catch – the squatters were the decedent’s adult children who were also beneficiaries! Ah, there was the rub! This was going to get dirty! But I was up for the challenge.

Upon agreeing to take the listing, I immediately got in touch with the executor of the estate to begin the process. She was extremely motivated to sell but had reservations, as she was the oldest sibling of the squatters. The truth of the matter is that the longer she delayed taking action, the more liability she exposed herself as the personal representative of the estate. Once she finally agreed to move forward, I told her I wanted access to the property so that I may get a better perspective as to the true value of the property. We made the arrangements and I had a contractor join me, just to gain an idea of the level of disrepair and deferred maintenance and how that would impact value. The executor joined us as well, because the squatters were expected to be combative, but per the attorney, they listened to the executor.

When we entered the property, it was as if we had pierced the veil of a movie screen and were transported to a horrific scene of a dark and violent film. The home was full of drugged out individuals – women and men of all ages: men who appeared to be in their seventies, women in their 20’s. There were so many people in this small three-bedroom 1,200 square foot home. Some individuals were catatonic (on their high), others half clothed, many appeared to have not bathed in ages, the stench coming from there was indescribable.

It was shocking, horrifying, disgusting and downright sad. We asked politely, but assertively for them to exit the property while we viewed it – most complied and began walking out. I began to count them and lost track at approximately 13 individuals.  The house was a wreck. It had fecal matter on the walls, urine stained carpets, drug paraphernalia throughout. I am not going to lie – I wanted to run out of there!

As we exited to the back yard, we took a short staircase down the crawl space. The home sat on a slight slope, allowing for a substantially tall crawl space which I estimate was nearly 5 feet tall. When we opened the door we were in awe to discover that there were people living underneath the property! How could this situation get worse! We left the house in a hurry! While we exited, I noticed the neighbors of this property were well maintained homes with children’s toys in the front yard. I thought about how dangerous it would be for those kids to play in their own yard with such a negative impact from this property. As a father, that motivated me deeply to move this property fast!

Once listed, my objective was to net the estate as much money as possible despite the current conditions. It became evident that it was going to be both difficult and unsafe to show the property. The executor’s siblings were unwilling to cooperate and vacate. The City Attorney was pressing hard on this property due to the criminal activity coming out of the place. We needed a solution – fast! The best option for this property was to sell it to a cash investor willing to take the property in its current condition and have said investor assume the responsibility of evicting all squatters and trashing out the place. Luckily, I am well networked with investors in San Diego and was able to obtain a fair an just offer that the executor and the court liked.

When the escrow closed the executor was relieved to be able to move one with her life and not have the looming liability hang over her head. The investor, after a few months was able to evict all occupants and rehab the property. Once rehabbed a nice young family was able to move in and now the kids in the neighboring homes have more friends to play with in a healthy and positive environment. The city attorney’s office called me to congratulate me on essentially improving the neighborhood. It was a daunting challenge, but boy was is worth it! 

Tips for buying Probate Property with Court Confirmation.

Probate properties requiring Court Confirmation are often sold below market value but can take 5 months to several years to complete the process. Purchasing probate properties with Court Confirmation can be confusing. We went ahead and put a list of steps to help investors and potential home buyers throughout this process.

1. Contact your real estate agent.

The executor of the estate will hire a real estate company to handle the sale of the property. Make sure to be clear with your agent about how much you are willing to spend. Agent Prolific has an extensive probate listings page and will gladly guide you throughout the entire process.

2. Make an offer.

You can make an offer on the probate property at any time. However, sometimes there can be  specific requirements for probate properties that are not typically required for regular real estate – For Instance:

  • You must give a deposit of 10% of the offer price.
  • The representative of the estate may accept or give a counter offer.
  • Even if your offer is accepted, it is only a provisional acceptance until the probate court confirms ( if the probate requires court confirmation)

3. Ask for an inspection.

If your offer is accepted, ask to have a home inspection. Family members selling a property do not know all of the problems with the property. Trust us, you will want to inspect the home to get a better understanding of potential problems.

  • It is important to note that probate property sales are “as is.”

4. Move forward after the offer is accepted.

Once the seller accepts your offer the attorney for the estate applies for a court date so that the sale can be confirmed.

5. Attend court hearing.

In order for the sale to be confirmed, you must attend a court hearing, along with any other potential buyers. The court will identify the property you made an offer on and then conduct an auction style bidding process. If there are no other bidders, most likely the court will confirm your offer.

6. Outbid other buyers.

If there are other interested parties, the court will begin raising the price of the property until a final bidder is left.

7. Finalize the purchase.

Once a bidder is set as the purchaser, they have to show that they have the financing to continue forward with the purchase of the property. Once confirmed the buyer will sign a contract with the estate court.

  • All funds would be transferred to the estate, and the buyer would become the new property owner.
  • This process may take about 30-45 days from the court hearing