Understanding the difference between regular and probate sales

On Behalf of | Apr 6, 2022 | Estate Planning, Probate |

If you die without a will in Alabama, your home or another piece of real estate that you owned will likely have to go through a probate sale. Selling a home in this manner can prove lengthy and complex for your loved ones left to deal with it.

How probate sales differ

When someone dies without a will, all of that individual’s property, including any real estate holdings, enters the probate process. Probate courts authorize and oversee the property’s sale. The court also retains control over the sale, including the listing price. Once the property is listed for sale, buyers can bid. The estate representative can accept an offer, but the sale is not official until the probate court approves it. That detail can take a while as the hearing must be scheduled. Even then, the sale may not be approved as other bidders can make higher offers at the hearing.

Probate sales carry potential risks for buyers as they should get inspections of the property to uncover any potential problems. The price of probate properties is often lower than those listed under a regular real estate sale to offset the delays and complications of the probate process. Thus, your heirs may not receive the real value of your assets.

The importance of estate planning

The inherent complexities of probate real estate sales underscore the importance of having a comprehensive estate plan. Wills, trusts and similar documents are an important part of the estate planning process.

You should also keep in mind that with the exception of irrevocable trusts, most estate plan documents can be changed. It’s wise to review them periodically to ensure that they meet your needs and that your assets will be distributed according to your wishes.