Buying a deceased estate isn’t something most people think about when they’re house hunting. But it can be an interesting option if you know what to expect.
So, what exactly is a deceased estate?
Many people mistakenly think a deceased estate means someone died in the house, but that’s not usually the case. It simply means the property is being sold as part of the estate of someone who has passed away. They may have been unwell in hospital or an elderly person who passed away in a nursing home.
It’s worth noting that while agents must disclose material facts like violent crimes that occurred on a property, they don’t necessarily have to disclose if someone passed away peacefully in the home. However, some agents might choose to disclose this information to avoid potential issues later.
These properties sometimes come with good deals. Maybe they’re priced to sell quickly, or they might be older homes perfect for a renovation project. But it’s not all smooth sailing. There are a few things you need to watch out for.
The process can be a bit different from your usual property purchase. You’ll probably deal with executors instead of a seller. And there might be some extra legal stuff to sort out.
This article breaks down what makes deceased estates unique, how to buy one, the pros and cons, and what to check before making an offer.
What Makes Deceased Estates Different
The Role of Executors
When buying a deceased estate, you’re not dealing with your typical seller. Instead, you’ll be working with executors. These people are in charge of sorting out the deceased person’s affairs.
Executors have a big job on their hands. They’re responsible for managing the estate, which includes selling any property.
But here’s the thing – they’re not real estate agents.
They might be family members or friends of the person who passed away. Sometimes, they’re professionals like lawyers.
Executors need to sell the property for a fair price, balancing the interests of all parties involved. They typically want to close a sale quickly and without emotional attachment, which is good news for buyers.
However, if there are multiple executors or beneficiaries, disagreements can cause delays, so be prepared for potential complications.
Probate and Its Impact
Before a deceased estate can be sold, something called probate usually needs to happen. Probate is basically the legal tick of approval that says the executors can deal with the estate.
Probate is granted by the Supreme Court of NSW, often after the lawyers submit the necessary forms on behalf of the estate. Sometimes, a sale can start before probate is granted, but it can’t be finalised until it’s sorted.
How long does probate take?
It could be a few weeks, or it could drag on for months.
Settlement dates can be affected by this uncertainty. If you’re buying a deceased estate, you might need to be a bit flexible with your timeline.
In NSW, another important factor is the property title transfer, which must occur before the sale to ensure the property can be legally sold and transferred to a new owner. This often overlooked fact is because property ownership can only be legally transferred from one living person to another, which is why executors need to be granted probate before this step can occur.
Pros and Cons of Buying a Deceased Estate
Potential Advantages
- Lower Price: Deceased estates are often sold by motivated sellers looking to finalise the estate quickly, offering opportunities to secure a bargain.
- Renovation Potential: Many deceased estates are older properties that haven’t been updated, often because the previous owners were elderly. It’s a great opportunity for renovations to add value.
- Less Emotional Attachment: Executors typically have less emotional attachment, making negotiations more straightforward.
- Potential for a quicker sale process: Executors usually aim to wrap things up efficiently.
Possible Challenges
- Settlement Delays: Probate delays can cause uncertainty in the buying process.
- Lack of Property Information: Executors often have limited knowledge about the property’s history, leaving potential issues undisclosed.
- Multiple decision-makers: Dealing with several executors can complicate things.
- Auction Sales: Deceased estates are frequently sold at auction, which can be daunting for some buyers.
- Emotional Barriers: The psychology around death can be a factor. Even if the person didn’t die in the property, some buyers might feel uncomfortable with the idea of purchasing a deceased estate.
Questions to Ask Before Buying
Before buying a deceased estate, ask these key questions to minimise risks:
- Has probate been granted?: Without it, the sale can’t be finalised, causing delays.
- Is the property title transferred?: Ensure it’s been transferred to proceed legally.
- Is there a mortgage?: Check for existing mortgages and lender consent.
- What is the property’s condition?: Limited information about the property makes inspections crucial.
- Who are the decision-makers?: Ensure all executors or beneficiaries are on the same page to avoid complications.
- Do I have the right professionals?: A buyers agent, conveyancer or solicitor experienced in deceased estates is essential to guide you through the process.
Lessons from a Deceased Estate Purchase
Let me share a real-life example. I was working with a client interested in a relatively new build—only six years old—which was part of a deceased estate. During the cooling-off period, we discovered the property lacked an occupation certificate.
An occupation certificate confirms that a building is safe and legally compliant for occupancy. It’s basically the council letting you know you can occupy the property.
Without this certificate, there were significant legal and financial risks. Although the structure was okay from a build perspective, obtaining an occupation certificate for the property was very difficult and maybe even impossible due to some missing documentation.
This posed a great risk for my clients, leading us to withdraw from the purchase. We could have pursued a Building Information Certificate as an alternative, but my clients weren’t comfortable with that option.
This experience underscored the importance of thorough due diligence when buying a deceased estate.
Even properties that seem straightforward can have hidden complications that only come to light with expert investigation.
In this case, the missing occupation certificate not only affected my clients’ decision but also made it harder for the executors to sell the property, forcing them to lower the price.
Stories like this remind us why having the right professionals on your side is so important when navigating the complexities of buying a deceased estate.
Conclusion
There are many advantages to buying a deceased estate, including the possibility of securing a property at a lower price or enhancing its value through renovations.
However, it’s essential to understand the legal processes, be prepared for potential delays, and ask the right questions to avoid hidden pitfalls. With the right approach and professional guidance, buying a deceased estate can be a rewarding experience.
If you’re considering buying a deceased estate, it’s worth getting expert help.
Want to chat about your options?
Contact me for a free consultation. I’m always happy to share what I know and help you determine if a deceased estate purchase is right for you.
