While buying a home through an estate sale can be like purchasing any other resale property in many ways, there are a few key differences that are important to know.
When you come across a property listed for sale, the homeowner is usually the seller. However, if the homeowner has died, the estate becomes the seller and is represented by the person in charge of administering the estate, also known as the estate trustee.
You should be aware that information about the home may be limited. The estate trustee may not know details such as the age or condition of the home’s systems, history of renovations or damages as a typical homeowner would. If you’re interested in buying the property, discuss with your real estate representative making your offer conditional on a home inspection and any other conditions they might recommend.
Another key thing to bear in mind is that your closing date can change, depending on the circumstances. The home’s title is in the name of the deceased homeowner. If the deceased owner left a will and the estate is a simple one to administer, there may not be much delay. However, if there’s a will with a complicated estate or no will, the estate trustee may need to apply to court for a “certificate of appointment of estate trustee,” or probate certificate. This could have been attained prior to the property being listed, or the estate trustee could still be in the process of doing so. If the home is listed for sale before a probate certificate is granted, the seller may ask for a closing date that is several months away or may have a clause that permits the closing date to be delayed if a probate certificate isn’t granted by the court in time. Ask questions and get your representative’s professional expertise to understand what this may mean for you as a buyer.
Assess how flexible your timelines are. Have you already sold your current home or is your lease coming to an end soon? If the timeline of the closing could be a concern for you, I suggest that you ask your representative to check whether the estate trustee has already completed the probate process prior to signing the sale agreement.
If you anticipate that the estate won’t be resolved in time for the chosen closing date, you can also consider adding a clause to your offer stating that you’ll be permitted to rent the property until the sale can close.
As well, I strongly recommend that you seek the help of a lawyer who is insured to practice real estate law. Your lawyer can give you strategic legal counsel, review the documents, and take the necessary steps to complete the transaction successfully.
Apart from these precautions, do your research, choose a representative you’re comfortable with and take the time to think through the factors to ensure that the home is suitable for your needs and budget. Good luck!
Courtesy of: 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.