As real estate investors, words like wholesaling, leads, and ‘after repair value’ (ARV) are part of our every day language. Probate, on the other hand, isn’t a term everyone knows or understands.
It can be confusing. We get it. Many people don’t understand how it works so they don’t even consider it as being a possible strategy to take advantage of. The truth is that in many cases, properties in probate have been well maintained by the previous owner and many come with motivated sellers. Tapping into probate leads can provide you with new opportunities to grow your business and close more deals.
Let’s start off with the very basics for probate leads.
What is Probate and What Makes it a Good Source for Leads?
To put it simply, this term refers to the process of distributing all property that is left behind when someone dies. Debts are first settled and then the title of property is transferred to the executor of the estate, heirs, or beneficiaries. This is depending on if there was a legal will in place or not.
Not all properties go through probate. State laws vary so please do research on the area you’re investing in.
Properties in probate can make great leads because of the fact that the appointed seller will (in most cases) not be living in the property and they don’t necessarily have a plan for what to do with the property. Another obstacle that a seller faces is their proximity to the home. A long commute back and forth wears on a person and makes it difficult to maintain the property themselves. To your benefit, many of the homes have had the same owner for a good amount of time and were maintained properly.
In addition, homes in probate are often sold at a discount so that the cash can be pulled out of the sale of the property. The seller isn’t as worried about getting top dollar as they are taking it off their plate and “moving on”. That being said, this is a very sensitive time for them and sympathy needs to be shown. Everyone handles losing a loved one differently so contacting them in a respectful way to let them know you can be their solution if they need to sell the home.
How Can I Add Probate Leads to My Current Business Model?
Probate leads offer properties that, in most cases, aren’t in need of much repair. Take advantage of these homes by wholesaling them for quick money or renting them out for long term cash flow.
If the seller isn’t ready to sell the property immediately, try sending them a letter every few months to keep your offer in front of them. Listen to their needs to find out what their goals are for the property. Not every seller will be ready to sell the property right away but that doesn’t mean they’re going to keep it long-term. This is a chance for you to show that you’re thinking about them and want to be a solution for their situation.
Probate leads can provide discounted homes in the area you invest in; you just have to know where to look. The county clerk maintains all probate data and many counties have this information available online.
Do your research. Offer sympathy when reaching out to the seller. Listen to determine the seller’s timeline and willingness to sell the property. Decide the right exit strategy for the deal. Probate can get complicated but don’t discount them as they can provide you with great return-on-investment. Markets are always changing and having another source for leads can be a great benefit for your business.