Is It True That PROBATE PROPERTIES Must Sell For 90% Or More Of The Market Value?

Is it true that probate properties must sell for 90 percent or more of the market value?

This is a loaded question.

First of all, what is probate?

Probates are basically properties that are owned by an estate, but there was no will.

It’s when somebody died; they owned the property when they were alive, but when they died, there was no will.

So they had to go through a court proceeding or some sort till today, after 50 years.

I don’t understand exactly how that goes down.

You know why?

Because I don’t bother myself with legal stuff.

That’s not what I do.

There are two things I could potentially be when it comes to this game: either I’m a marketer or I’m an investor.

And nothing else; I’m not even a wholesaler.

Wholesaler, what is that?

Wholesaling is a strategy that I do use, but that’s just one strategy out of many.

There are so many strategies I cover in Real Estate Money Secrets that you should go pick up right now.

My point there is that Probates, that’s it right there.

Somebody died without a will, and typically the children that inherited the property want to get rid of the property.

They don’t care about these properties; some of them think there’s big money in the house.

Some of them may be well off and they just want to sell it.

They understand there’s work needed; repairs are needed in the property, and they don’t want to deal with that.

Maybe they live like 2000 miles away.

So this can present good opportunities for investors, as you can imagine.

That’s where this question is coming from:

Is it true that probate properties must sell for 90 percent or more of the market value?

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That rule right there, by default, is false.

What if the property is worth a lot less than that?

Okay, I guess it’s worth 90% of the market value.

What is the market value?

So I always tell people it depends on what you’re looking at.

If I’m looking at a piece of property and I’m talking to the owner, and I offer them fair market value.

What is fair market value?

Fair market value means so many things to so many people. Just because your property is worth $200,000 after repair doesn’t mean it’s worth $200,000 right now.

Does that make sense?

Because it’s worth $200,000 after repair, it does not mean it’s worth $200,000 right now.

It means it’s worth $200,000 after repair.

The after repair value is not the same thing as fair market value.

At any point in time, if somebody wants to sell me a property at 90% of its fair market value, I always welcome it because I’m the buyer and I get to determine, at least with everyone I deal with, what the fair market value is.

And I’m gonna run the numbers; I’m gonna run the comps.

I determine what the fair market value is.

But the question is coming from the confusion between after repair value and fair market value.

And if I have an appraiser or a Realtor come to me by way of the owners and say, “Hey, they told us this property is actually worth $200,000”.

I’m gonna look at it a little closer, and I’m going to say, “Send me some pictures”,

…because I can only do virtual wholesaling.

By the way, I’ve been doing virtual wholesaling since forever. Even when I only focused in New Jersey locally, I did it forever.

Like I literally made people sign their contract and fax it to me.

I’ve been doing that at least since 2006.

I stopped going to people’s houses in 2005 because I had a terrible experience going to people’s houses.

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The terrible experience wasn’t because somebody shouted at me or anything like that.

No, it wasn’t that; it was because I was wasting my time.

A lot of time I would show up and people are not ready to sign my contract.

Evidence that I’m dealing with a non motivated seller, but it’s a waste of my time so eventually I learned that.

At that time, fax was a popular thing; there was no docuSign or anything like that.

I just say, “Hey, I’m gonna send you an email with the contract. Sign it and get it over to me and then we can get started”.

That’s how I do it, and if you don’t sign it, there’s no harm.

It just means you’re not motivated enough, and I focus my time and energy on marketing.

It’s either I’m marketing or I’m investing; I stay away from everything in between.

All the legal stuff.

I hope I answered that question:

Is it true that probate properties must sell for 90 percent or more of the market value?

Again, 90% of market value, I always welcome it, but I get to decide what the market value is.

That means I’m getting a discount with all that.

So if the property is worth $200,000 after repair value, and it needs some work.

It needs about $30,000 of work; like right there we’re slashing off $170,000.

In addition to that, I’m slashing off 35% of that.

That’s another $35,000 because now I have to put in the work, so I’m gonna charge you business costs.

Because I have to do business now, I have to fix and flip the house, so I got to charge you.

I gotta charge the situation 35%.

Then, in addition to that charge, another $30,000 for the repair, that’s $65,000 off already.

We’re dealing with $135,000 already, and I’m probably gonna start negotiations at,

…I’m gonna think like, Okay, worst case scenario, let me slash another 10% off of that.

So we’re now dealing with $110,000.

The fair market value of your property is $110,000, and you wanna give me 90% of that discount?

That would be essentially another $11,000.

I get to pick it up for $99,000, I always welcome that.

Again, it all depends on how you look at it.

Fair market value and after repair value are never the same thing.

That’s really the answer to that question.

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Is Probate Value the Same as Market Value?

Probate value and market value aren’t exactly the same. Let me break it down for you in simple terms.

Probate value is more specific to properties that are part of an estate when someone passes away without a will.

It’s often determined during the probate process, which is the legal procedure to settle the estate.

This value can be affected by various factors, including the condition of the property, demand in the area,

… And other legal considerations.

On the other hand, market value is what a property is worth in the current real estate market.

It’s the price a buyer is willing to pay and a seller is willing to accept, assuming both parties are knowledgeable about the property’s condition and the current market trends.

In summary, probate value is linked to the estate settlement process, while market value is the broader value tied to what buyers are willing to pay in the open market.

Debunking Probate Property Myths: Unveiling the Market Value Mystery

Have you ever wondered about the intricacies of probate properties and their relation to market value?

Let’s break down the complex world of probate properties, market value, and the realities that govern these transactions.

Unpacking the Probate Puzzle

To begin, let’s clarify what probate really is. Probate refers to properties that are owned by an estate when an individual passes away without a will.

Essentially, these are properties left in legal limbo, requiring a court proceeding to determine their future. It’s a process that has been in practice for decades, aimed at resolving the distribution of assets and properties.

Now, the often misunderstood notion is whether probate properties must be sold for at least 90% of the market value. The truth is, this is a misconception.

The probate value is not necessarily tied to a specific percentage of the market value. It’s about determining the worth of the property in the context of the probate process, considering its condition, location, and other legal factors.

Understanding Market Value

Contrary to probate value, market value is a more encompassing term. It represents what a property is worth in the current real estate market.

Market value is dynamic and influenced by various factors such as demand, location, property condition, and comparable sales in the area. It’s what a willing buyer will pay and a seller will accept, given the property’s condition and the current market landscape.

You can use this tool to assess and analyze market value.

The Confusion Between Probate and Market Value

The confusion often arises when trying to correlate probate value and market value directly. Probate value is determined within a specific legal context, considering the circumstances of an estate. Market value, on the other hand, is broader, accounting for market trends, buyer preferences, and overall property demand.

Navigating the Investment Landscape

Investors often find great opportunities in probate properties. The heirs of the deceased may want to sell these properties quickly, either due to disinterest or practical reasons such as distance from the property. This can be a golden opportunity for investors to step in and acquire properties at a potentially discounted price.

However, the discount isn’t necessarily a fixed percentage like 90% of the market value. It’s about negotiating a fair deal based on the property’s condition, needed repairs, and other factors that affect its actual market value.

In conclusion, the belief that probate properties must sell for a fixed percentage of the market value is a misconception.

Each property is unique, and its value should be evaluated on a case-by-case basis.

As an investor, understanding the distinctions between probate value and market value is key to making informed decisions and striking advantageous deals in the real estate market.

So, next time you encounter the question of probate properties and their supposed 90% market value rule, remember, the real estate landscape is more nuanced and varied than a simple percentage can capture.

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