Questions on Estate Sales

[Michael Chang]

Hi BP community,

I am a newbie in BP. I am going to a house tour an estate sale tomorrow in a good neighborhood near the Philadelphia suburbs. Since the seller's disclosure is not available and it's my first time looking at an estate property sale. What are some questions that I should ask my real estate agent about? Is there any implication that comes with an estate sale? Has anyone bought properties from estate sale that went didn't go as well?  Your thoughts and comments are much appreciated. 

Thanks in advance for your help,

Michael

[Natalie Schanne]

@Michael Chang - Are you looking for a flip or a rental or a home to live in?

If you want a home to live in, with interest rates being so insanely low I would recommend buying your dream home within your prequalification budget and skipping the brain damage of finding a great estate deal and renovating it while you live there. (We bought a foreclosure REO from Fannie Mae and wrapped 70k of rehab into a 5% down loan and we didn't have a complete house for about 9 months while living here with kids. My husband said he will never do it again. We created about $100k of non-sweat equity.) I say this because it's only like $30/mo more to buy $10,000 more house (or similar) so you don't want to be cash out of pocket $50-100k with a low $$ loan. The 203k / Homestyle rehab loan process sucked.

If you’re looking for a cash rehab or flip project, download a flipping checklist and assess the $$$ you’d put in each area of the house such as kitchen, hvac, then ask your agent what a flipped home would sell for. (Also ask him or her to take you to a flipped home in that area to see what’s different). Floor plan, busy roads, and neighbors can change your price a lot. 

If your agent is not familiar with rehabs or estimating ARVs then you can ask more questions here or on the Facebook BiggerPockets group. Once you’re under contract people can give you some specific and good advice after looking up the property. Before then you’re inviting competition if you post the address. 

Remember your agent doesn't know much more about the house than you do. We get a couple lines in MLS sometimes. The seller disclosure may or may not be filled out with details on roof age, etc. If you like the house, email questions you want your agent to ask their agent before you make an offer. Good luck!