If you’re in the market for property in the Eastern Suburbs, there’s a good chance that you’ve come across homes being sold as a deceased estate. While these properties follow different transaction rules, they offer great potential and opportunity. It’s important to understand the different types of deceased estate sales and how they work.
1. Mortgagee in Possession
In the case of a mortgagee in possession sale, the property is still mortgaged, and the bank has a right to recoup any money it’s owed.
Sales may be held through an auction or private treaty. Typically, the bank is only looking to sell the property at a fair market value.
Often, these properties offer great opportunities to secure a favourable price, especially if the property has been for sale for a while. The bank may be willing to work with you just to get the property off of their hands.
Because the bank owns the property, there is no emotional attachment that may slow down the sale or interfere with negotiations. These properties are often a great opportunity for investors.
2. Sale by Executors or Beneficiaries
By far, the most common estate sales, are those that involve an executor or beneficiary. The owner of the estate dies, and the deceased appointed an executor of the estate. The executor has the responsibility of selling off the estate or ensuring that the assets are dispersed as per the deceased’s wishes.
Beneficiaries, often children or relatives of the deceased, may inherit the property, too.
If the estate goes up for sale, it must be given the right of probate. While the property’s sale can be private, it’s most common that the property will be sold at auction. An auction allows for transparency and the ability to determine the market value of the property.
Buyers can often negotiate prices and lower the asking price of the property.
3. Sale by the Public Trustee
Some estates are fully paid off, but there are no beneficiaries to take control of the estate. In this case, a Public Trustee, will take possession of the property and prepare it for sale. Since there are no beneficiaries, the funds from the sale of the estate will go into the government’s own public fund.
These sales are often preferred because:
- Reserves are low
- Property must go to public auction
Buyers agents Eastern suburbs often recommend these sales because the buyer can find bargain properties.
Sales agents will help prospective buyers understand the type of deceased estate for sale. Once you understand the estate type, it’s easier to determine if the estate is worth pursuing. Each type of sale presents its own challenges and opportunities. Depending on the seller, there may be room to negotiate a more favourable price or terms.