When parents pass away, inheriting their home can be both a sentimental and practical decision. However, navigating the legal and financial intricacies can be daunting. Sam Price, a seasoned estate planning attorney from Price Law Firm, shared his expertise on this topic in a recent interview, providing invaluable guidance for anyone facing this scenario.
Understanding the Probate Process
When a personal representative (often a family member) wants to buy a deceased parent’s house, they must navigate the probate process, which can be complex. Sam Price outlined the essential steps and legal requirements involved:
- Full Purchase Requirement: The personal representative must buy 100% of the house. They cannot use their inherited share as a down payment.
- Court Approval: If the personal representative wants to buy the house, they need court approval. This involves a formal process where the court confirms the sale.
Methods for Purchasing the House
Sam Price discussed two primary methods for a personal representative to purchase a house from an estate:
Court Confirmation of Sale:
- Process: File a petition, publish in a newspaper, and present a purchase agreement to the court.
- Auction: The court holds an auction where others can bid, making this method potentially risky for the personal representative.
- Requirements: Typically requires a 10% down payment and the sale price must be within 10% of the appraised value by a court-appointed probate referee.
Consent of All Heirs:
- Process: Obtain written consent from all heirs and submit a different petition to the court.
- Advantages: No auction involved, avoiding competition and making the process smoother.
- Flexibility: Fewer restrictions on down payment and sale price, as long as all heirs agree.
Beneficiaries Buying the House
When a beneficiary (not the personal representative) wants to buy the house, the process differs slightly:
- No Court Confirmation Needed: The sale does not require court confirmation if it’s not the personal representative or the attorney buying the house.
- Notice and Consent: The personal representative sends a notice of proposed action, and if all heirs consent, the sale can proceed without court intervention.
Financing Options
Price also explained the financing options available for purchasing a house in probate:
- Conforming vs. Non-Conforming Loans: Loans in probate are non-conforming and won’t meet Fannie Mae or Freddie Mac guidelines. Specialized lenders handle these loans.
- Temporary Loans: The estate can borrow money to pay debts and administrative expenses, and to provide cash to heirs. The beneficiary receiving the house must refinance this loan with permanent financing after the probate case concludes.
The Importance of Using a Realtor
Price emphasized the critical role of real estate agents in the probate process:
- Expertise and Protection: Realtors provide essential services such as marketing the property, ensuring legal compliance, and handling disclosures.
- Liability Mitigation: Using a realtor helps protect the estate and the personal representative from potential liabilities related to property transaction.
Sam Price’s Journey and Expertise
Sam Price’s personal and professional journey into estate planning is rooted in his own family’s experiences. Growing up, his parents were involved in real estate, and his father’s early death left his family navigating the complexities of probate and estate management. This background fueled his passion for helping other families through similar challenges.
Today, as a certified specialist in estate planning, trust, and probate law, Sam Price dedicates his practice to assisting middle-class families in managing their estates. His hands-on experience and deep understanding of real estate make him a trusted advisor in the field.
Key Takeaways
Here are the most important aspects of buying a house from an estate, according to Sam Price:
- Full Purchase Requirement: Personal representatives must buy 100% of the house.
- Court Approval: Required for personal representatives buying the house.
- Two Purchase Methods: Court confirmation with auction or heirs’ consent without auction.
- Beneficiaries’ Process: Different from personal representatives, no court confirmation needed.
- Specialized Financing: Non-conforming loans available for estates.
🗣️Notable Quotes:
“Until probate is complete, you don’t own anything. If you want to buy your parents’ house during probate, you must purchase the entire property at full market value to ensure all heirs receive their fair share.”
Watch The Full Interview Now:
Connecting with Sam Price:
LinkedIn: https://www.linkedin.com/in/priceattorney/
Facebook: https://www.facebook.com/PriceLawFirmAPC
Website: https://pricelawfirm.com/
DISCLAIMER: The Probate Realtor® Matias Baker Masucci is a licensed real estate broker in California DRE # 02054763. Any legal information provided is for informational purposes only and NOT for the purpose of providing legal advice. Contact an attorney to obtain advice with respect to any particular legal issue or problem. We make no guarantees as to the accuracy of any information.https://www.youtube.com/watch?v=rYjwWZL1RXI&t=47s
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