There are numerous benefits that come from buying a house from someone’s estate. You may get to keep the furnishings and appliances at no extra charge because including them in the sale is just easier than selling them separately or getting rid of them. You may get a good price per square foot because the executor doesn’t want to invest estate assets in making repairs and upgrades to the property.
However, there are risks that come from buying a home from an estate, the most noteworthy of which is the possibility of later title issues. Houses transferred during probate proceedings are among those most likely to have later title issues arise.
Why do probate real estate sales and title claims go hand-in-hand?
There are many moving parts involved in the probate process. The executor of an estate has to handle multiple responsibilities at the same time. They need to track down property and handle court appearances. They need to contact creditors and settle accounts.
They may overlook some of their obligations, like the duty to track down beneficiaries. If the executor failed to locate or notify a beneficiary or heir about probate proceedings, that person may later allege that they were a victim of inheritance theft. Essentially, they will claim that the executor stole from them by depriving them of their interest in the property.
Depending on what happens when they bring their claim in court, there could eventually be implications for the home where you live that you purchased from the contested estate.
Title insurance will help you handle a dispute
If there is any silver lining to facing a title claim from someone who feels like you don’t legally own your home, it is that your title insurance policy will help you defend your ownership. You may have coverage to help pay for an attorney to represent you in court over the title claim and also protection if the courts do not rule in your favor.
Even if it has been years since you purchased the home, a claim by a beneficiary who was not notified of the estate or who did not approve the sale could affect your ownership interest in the property. Learning about the situations that give rise to title claims can help you make better decisions when buying real estate or responding to claims about your home.