You can get a great deal if a home is part of an estate – but there are particular conditions you should include in your offer
First, what is probate?
Probate, in short, is the court procedure for two things:
• Official approval of the will by the court as the valid last will of the deceased; and
• Appointment of the person (or persons) who will act as the executor of the deceased’s estate.
Essentially, it is the court process that gives the executor (or executrix) the authority to act on behalf of the deceased.
Special Subjects in 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 home or condo under probate, you will have all your usual subjects as a buyer (inspection, financing, and so on). However, you must also have a subject for the seller that reads:
“Subject to the Seller receiving the following by _ (date)__:
“(1) a copy of a 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 has waived or released their claims against the Property. This condition is for the sole benefit of the Seller.”
To make sure the 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 something like, “If probate has not been granted by the closing date, the closing date will automatically be extended to 15 business days after probate is granted.”
Typically you will want to make this subject-to-probate date two to three 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 lawyer’s office.
Once the buyer has removed their subjects the property is technically 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 live. This means that, despite all the listing agent’s attempts to communicate that it is technically sold, they will still be inundated with calls and inquiries about the property.
When it comes to a probate sale, it would be wise to hire an agent who has some experience in this area, as there are many things that they know where others would not.