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

Question: “Is It True That PROBATE PROPERTIES Must Sell For 90 percent Or More Of The Market Value?”

This is a loaded question.

What is Probate first of all?

Probates are basically and essentially 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 like,

…there’s so many strategies I cover in Real Estate Money Secrets that you should go pick up right now.

Just go to RealEstateMoneySecrets.com.

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

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

They don’t care about these properties, some of them think there’s a big money on 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 the market value of 90%.

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 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, 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, 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, I get to determine 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 done virtual wholesaling since forever, like even when I only focused in New Jersey locally, I did it forever.

Like I literally make 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.

TRENDING: #1 SECRET to Get Agents to Give You COMPS FOR AFTER REPAIR VALUE 📍 Wholesale Real Estate

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 in and get it over to me and then we started to 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, 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, 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.