When real property is sold through a probate court proceeding, the terms are all cash, as-is and no contingencies. People are often confused by the term “all cash,” picturing wheelbarrows filled with greenbacks. Here’s a little clarification:
When the terms are all cash can the buyer still get a loan? Yes. But the loan contingency is removed. In other words, if for some reason there is a shortfall between the amount the bank will lend and the amount the buyer commits to purchase, the buyer is on the hook for the difference.
This can happen, for example, when multiple overbidders appear in court and the purchase price is driven up significantly above the original accepted offer. If a buyer was pre-approved for a loan at or slightly above the original accepted offer, but then bids over the bank-approved amount, the buyer has to come up with the difference to complete the transaction.
Please be aware that probate law varies from state to state. To see properties currently on the market, click here. If you have questions about buying or selling real property through probate, trust or conservatorship, The Sanborn Team can assist you. Contact us today at 310-777-2858 or [email protected].
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