Probate prospect and court approval ?

[George Rodriguez]

Hello BiggerPockets community ! I recently came across a selling prospect who has his property for sale in probate. The probate was recently initiated in Illinois and he is wanting to sell to me at below market value. My intentions with this property is to update it and flip it. It needs about 20k in updates. Am I in for a long arduous process requiring court approval and/or an independent appraisal of the home ? I'm asking so I know and can be prepared with how to handle and be a step ahead... 

[Guy Olds]

@George Rodriguez Every state has different probate laws and/or handles probate using different terms but some things are similar. I'm in California, you're in Illinois so some of the terms may be different.

For starters I'd head over to Google and start researching probate in your state. I've found that estate and probate lawyers have a wealth of articles explaining probate to potential clients so you should get a well rounded but basic understanding of probate and its terms in Illinois. You won't have to read read legal code just yet.

For your issue specifically, you want to make sure that the Personal Representative (PR) has the authority to sell assets without court approval. The PR is either an executor or Administrator. If the heirs disagree or are fighting the court will require that the PR get court approval for all actions. But If the heirs are happy campers the court will give the PR full authority to execute their job to sell assets and pay debts. The court will give the PR authority for this in some form of "Letters". In California, executors will receive Letters Testementary and Administrators will receive Letters of Administration. Selling a house with these Letters means it's a standard sale and you, the investor, are free to make a deal and buy the house without court approval. Usually though, the heirs will need to OK the sale.

So, ask your PR if they have full authority and can they show you their "Letters". If there are Letters, make an offer.  If your offer is accepted make sure you get a escrow company, closing agent or lawyer or whatever is used in Illinois, that is familiar with probate.If your PR has limited authority and needs court approval to sell assets make sure you understand the court confirmation process and auction if there is one. That's usually not a good way to go.

Good luck.