One of the most often asked line of questions we field as a compiler of probate data is related to timing. “How long do they take to close?”… “When does the executor want to sell the property”, etc.
Before we address these questions on the merits, a little refresher background is in order. Probate is the process supervised by a surrogate court of competent jurisdiction that determines the validity of a will, itemizes assets including real property, paying taxes and debts to creditors as well as expenses associated with will administration, then finally distributing the assets left over to the heirs that are entitled to them. Depending on the complexity of the estate and the intent of the parties, this process can be short or lengthy, typically ranging from three to seven months and rarely, upwards to a year or more. > Read more about the probate process.
It's been said that there are riches in niches. Savvy investors and agents understand the benefits of finding probate properties. Among them are the potential for deeply discounted properties, a huge inventory that only stands to balloon with an aging boomer population, the ability to get in front of motivated sellers that have a heightened urgency to sell the property attached to the estate, and less competition from other real estate professionals that seem mystified by the probate process or reluctant to engage in a heart-to-heart talk with grieving families.
Will all of these properties sell? Of course not. For those that will sell, when will they sell? We don't have a crystal ball – every case is different. But here are some scenarios that span every time frame.
Now vs. Future Business
There is some low-hanging fruit among families that simply want to cash out and move on to create better memories. When you contact these executors that are charged with divvying up the estate, you may find that some of them are motivated RIGHT NOW to sell the property, as if they were waiting for your call and the business falls in your lap. Yet we all know that in most cases, it is not that easy. If only it were.
One instance that we do not see uncommonly is when a living spouse is in the household and decides to sell the property after some period of time. If you contact the spouse or other family member that is residing in the home today, they may not want to sell. Contact these same people 2, 3, 4, even six months from now, and maybe they are ready to move onto another chapter in their lives. Perhaps they are feeling the burden of bills – keep in mind that mortgage payments, utilities, and just about every other expense that an ongoing household has to pay, must continued to be paid when someone passes. Maybe the spouse is emotionally ready to move on after some elapse of time in order to get closer to the kids and get into a new house. In other words, they need time.
In some cases, the probate process plays out and the property reverts to the heirs. At the completion of this process, the heirs have an itch to sell to cash out. Nearly always, the heirs don't want the property. They want the cash in the property. With the new-found authority and means to sell the property attached to the estate, they are eager to do so.
In some cases, otherwise motivated sellers may not be ready to sell the property until they find out what to do with the personal belongings of their loved ones. Clearly, this is an emotionally charged, gut wrenching job, particularly if the loved one was very close. When someone passes, they have personal belongs and the executor is charged with the often thankless task of disposing of them. To the families, these are a treasure chest of memories. To an outside party, it is merely stuff. Some agents and investors we work with offer to “rescue” classic cars, fine jewelry, antiquest, and other prized items, and we know of at least one agent in Florida that makes this an integral part of her strategy, as much or more so than selling the property. This is a touchy subject and goes beyond the scope of this article.
- Some probates will be sold immediately.
- Sometimes, the estate will hold onto the property and sell it after some period of time.
- Sometimes, the property will be left to the surviving spouse or other family member
- Sometimes, the spouse or family member will want to sell the house after living in it for a short period of time
- Sometimes, the family member will be motivated to sell only when the personal belongings of the deceased is disposed of in a satisfactory fashion.
- Whatever the time frame, once the executor does in fact make an affirmative decision to sell the property, they will want to sell it as soon as possible.
Given such a wide range of time tables, in our view, we can recommend the following:
- Whether your probate leads are generated through agent or attorney referrals, by compiling this data yourself at the court house, or outsourcing this tedious task to another provider, it is advisable to make multiple contacts with the executor of the estate to keep your willingness to help settle the estate “top of mind”. Through repeated contacts over a sustained period of time (also known as a drip campaign), you will reach the decision maker at the time when they are nearing an affirmative decision to sell the property, whenever that may be.
- To the extent that everyone has a different time frame to sell the property, it may be prudent to find aged or archived probate filings. Remember, someone that may not want to sell today, may find it makes sense to sell 2, 3, 4 months later. So, it is not helpful to think purely in terms of freshness or timeliness of data.
It's a fact of life that trillions of dollars will be transferred from one generation to the next. Stay tuned to future posts where we further delve into some actionable strategies on how to capture your share of the niche probate market. Till next time, A-B-C – Always Be Closing!