I’ve found a great home that I want to buy but it’s being sold as part of an estate. How will that impact the purchase?
Typically, when you see a home listed for sale, the seller is the homeowner. But if the homeowner is deceased, the seller is the estate, and is represented by the person in charge of administering the estate (the estate trustee).
The basics of buying a home that’s part of an estate sale are generally similar to buying any other re-sale home. But, there are a couple of considerations you should be aware of.
First, your closing date might be a moving target. Since the home’s title is in the name of the deceased homeowner, the trustee may need to get permission from the courts to sell the home on behalf of the estate. This process is called probate. Sometimes this will already have been done before the property is listed.
As the home may be listed for sale before probate is granted, the seller may ask for a closing date that is several months away or may have a clause that allows the closing date to be delayed if probate isn’t granted in time.
As a buyer, you need to be aware of your own timelines and needs. Have you already sold your existing home or given notice to your landlord? If so, do you have a back-up plan if the closing date gets postponed? How much flexibility do you have?
One potential solution is to add a clause to your offer that states if probate hasn’t been received in time for the sale to close on the selected date, you will be able to take occupancy of the home until the sale can close. Essentially, this means you will be renting the home from the seller at a particular price, until probate is granted and the sale is able to close. While this may not be appropriate in all circumstances, it’s something to discuss with your lawyer if you are considering it.
In addition to working with your registered real estate professional, you should seek the advice of a real estate lawyer when you draft your offer to ensure the appropriate terms and conditions are added.
The second consideration you should be aware of is that less information may be available about the state of the home than with a typical re-sale home. Since the homeowner is no longer around to offer insights about the age or condition of the home’s systems, such as the furnace, roof or plumbing, or the home’s history in terms of renovations, damage, fires, etc., a home inspection is a smart move.
Be sure to seek out a qualified home inspector to help you assess the condition of the home and its systems and identify potential problems. Consider referring back to my two-part article series on home inspections from July for more information. Both articles are available on the Toronto Star’s website.
Aside from these considerations, you’ll want to take the same steps as you would with any other property. You’ll want to take the time to think about whether the home meets your needs and whether it fits within your budget.
As always, be sure to ask questions if something is unclear and get any details you discuss in writing.Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.