Thousands of homeowners leave their property behind for their heirs every year in America. The inheritors of these properties are eager to sell their properties once the probate process is over. Getting probate leads for your real estate business should thus be simple. Yet somehow it’s not. That’s because most budding real estate investors and house flippers in San Antonio take the wrong approach to secure probate leads.
This guide is an attempt to guide you through the probate process and help you source reliable probate leads. Read on to learn the nitty gritty of this niche real estate segment. It’ll give you an idea to strengthen your real estate business.
What are probate leads?
It is important to understand the concept of probate before we talk about probate leads. The American Bar Association has a simple definition of probate. It defines probate as the legal process that gives recognition to a will.
The will is left behind by a decedent. This is one who dies leaving his or her property behind. The probate process involves appointing an estate representative. This person distributes the assets to the beneficiaries.
The heirs and beneficiaries inherit the property because of two major reasons
- Death of the homeowner (usually an elderly person who bought the property)
- Personal reasons (like real estate division during divorce proceedings)
Regardless of who inherits the property – it’s been observed that such properties are put up for sale once the probate proceedings are over. The property inheritors either want to move to a different place for a fresh start or simply don’t have the means to maintain the property.
This is an ideal scenario for real estate investors or house flippers San Antonio. They can invest in these properties and turn profitable once the dust settles. They can renovate the property and sell it for a good profit margin.
Such properties are called probate leads by real estate investors and agents. Getting these leads is crucial for these stakeholders as it helps them connect to homebuyers and generate good commissions.
However, getting reliable probate leads is easier said than done. These homes are not always listed on MLS records as the homeowners want to keep the sale private. We will talk about sourcing good probate leads in more detail. But first, we will take a look at the homeownership patterns in America to understand the real estate market better.
An analysis of the homeownership data in America
The US Census Bureau stats present an interesting picture of home ownership in America. It’ll be of great interest to house flippers San Antonio as well as real estate investors everywhere in the US. Here’s what the latest homeownership data says:
- About 66% of people in America own homes (as of Q4 2022)
- Older Americans (those above 65 years of age) have a much higher homeownership rate than the millennials – the figure stands at a massive 79% (nearly double of those under 35 )
- Mid-western America has the highest homeownership rates in the US (70.1%) followed by the Southern states (67.3%)
- Alabama (74%), Arizona (70.7%), Colorado (70.2%), and Florida (68%) have a higher national average in terms of homeownership.
- New York (54.3%), California (55.3%), and Hawaii (61.3%) have the lowest rates of home ownership in America.
- There’s little change in homeownership rates in the last 6 decades (between 63-69%)
- Americans live in their homes for 13.2 years on average.
The homeownership data makes one thing clear. There are plenty of old homeowners in the US. These homeowners may or may not have prepared a will. This is relevant because the probate laws are different in different states. The time taken to complete the proceedings may vary as a result and it may affect the property possession date of prospective buyers.
Real estate investors have huge scope in the Midwestern and Southern states. Over two-thirds of the population owns a home here. The home-owning demographic also comprises mostly elderly people. Plenty of properties go through probate proceedings every year in these states.
As a real estate investor, it is crucial you handle this delicately. A probate property is not like your regular real estate investment. There’s death involved so the inheritors may be emotionally charged. The property negotiations have to be handled carefully and sensitively.
The property sellers in this case are highly motivated. The property deal should thus be handled with extra care. Good communication plays a major role in this context. You shouldn’t come across as someone trying to take advantage of the situation.
The best way forward, after you get the probate leads, is to connect with the sellers and help them navigate the probate proceedings. It helps them figure out the legal documentation and probate framework in general. It eventually speeds up the whole process and your property contract is drawn swiftly.
Let’s see how you can benefit from investing in probate properties.
Benefits of investing in a probate property
Here are the major benefits of securing probate leads:
- Rising probate inventory
Not many people know that probate properties form a great part of the real estate inventory. About six million probate properties are there at any given time in the market. The American population is aging and they are leaving behind more probate properties with the passage of time. This is the best time to invest in probate properties as the market is wide open.
- Motivated sellers
The people who inherit the properties are usually in a hurry to sell them off. These are the most motivated property sellers you’ll ever come across. The heirs who receive the property either want to pay off the mortgage debts or go for a fresh start altogether. Their urgency to sell is also proved by their distrust of MLS postings.
- Niche market segment
Competition is quite low for probate properties. These are out of reach of most homebuyers and real estate investors due to lack of awareness. Negotiating probate leads also involves communicating with a grief-stricken family and many don’t have the stomach for it. Investing in such properties gives you a great head start.
- Profitable venture
A probate property is a profitable venture in every sense of the term. The properties put up for the probate process are often built in prime locations. They are also sold as it is, so your acquisition cost is low. You can fix and flip the house and make lucrative returns on it. The commission rate can go as high as 50% of the market value in many cases.
- Free from market setbacks
A probate property is economically shockproof. It will always be available in the market. A probate property sale goes unhindered no matter what the prevalent real estate scenario in the country. The sale of these properties anyway happens rather privately so only particular stakeholders look for such properties.
How do you find good probate leads?
There’s a perception that it’s difficult to get probate leads. Images of doing strenuous real estate legwork come to mind when investors think of getting probate contracts. The fact that it takes months to get the probate process to be over only adds to this perception. However, it’s not necessarily true. You can get actionable probate leads if you go about the property search smartly.
Here are the best ways to secure probate leads for your business:
- Buy leads from an off-grid property database
An off-grid property database provides concrete probate leads sourced by experienced real estate professionals. You can buy single probate leads from these websites or get bulk leads if you want. Consider investing in such a lead source to get the best property deals.
- Network with probate clerks and lawyers
Networking is crucial in this business as you get access to property info directly from the professionals. Probate clerks and lawyers have first-hand info on probate properties and you can get hold of such information before your competitors.
- Check the obituary page and classified ads
Checking the obituary column and classified ads in the newspaper is a good way to find out potential probate properties. You may get current updates on recently passed individuals and their heirs. It helps you connect with these individuals and negotiate the contract.
- See MLS records
MLS posts should not be ruled out when you carry out your property search. These sites have category-wise segmentation of property information and give you good resourceful leads. You can save a lot of time and effort by sourcing your leads from these sites.
Key Takeaway
The key to negotiating a property contract after getting the desired probate leads is patience and good communication. You’ll need to be compassionate towards the grieving family and have a little patience before you initiate the negotiation. Make a move too early and you’ll lose the contract and take too long and you’ll be late! The opportunities in the probate market are huge for house flippers in San Antonio and other parts of America. So invest in an off-grid lead source and get your value for money.
