Executor Auction - What to look for

[ourhouse]

Planning to buy a property off executor auction but unsure what questions to ask and what areas to look in contract to uncover the tricky bits

1. As I understand it can be a deceased estate or bank respossession, are there any other categories as well.
2. What are the risks to the purchaser e.g. a beneficiary who was left out of will makes a claim in the estate after its sale
3. What does "subject to a grant of probate’’ mean?
4. Whose name appears on the title - is it the deceased person or the beneficiaries. How to know if all the vendors (beneficiaries) have provided their consent to sell


Thanks

 

[Aaron_C]

1. No. An executor auction is NOT bank repossession. Bank repossession is called 'mortgagee sale' or 'mortgagee in possession'. Executor auction = deceased estate.

2. No risk per se it is the same as any other transaction. If the sale and settlement takes place and there is a disgruntled family member who claims to have an interest then due to the indefeasibility of title you, as the new bona fide purchaser, are unaffected. Your property is safe. If, however, the family member lodges a caveat prior to settlement that can throw a spanner in the works but it will only delay settlement and you will not lose any money as it is not your fault.

3. A 'grant of probate' is basically a court order which gives the executor (also known as a trustee) the power to deal with the deceased estate. Sometimes this can take a while to happen which is why a 'subject to..' clause is in there. This will cause your settlement date to be unknown and it may drag on for a while.

4. You won't know if the beneficiaries have provided full consent but if probate has taken place then the property will already be in the name of the trustee - and the title will indicate that the trustee/executor is acting as the executor of the deceased person's estate. There will also be, in the section 32, a statement showing the executor's authority to act on behalf of the deceased's estate.

 

[Jake Milne]

Quick note:

A common misperception that many purchasers have is that executor auctions or mortgagee sales are usually bargains. Most often the properties in question are underquoted which in some respects generates a more interest and therefore a competitive environment come auction day. This was the case on Saturday when I attended an auction whereby the quote range was in the low 300's but the property sold under the hammer for more than $400,000.

It's really important that you consider the comparable sales in the area and determine your own price range rather than relying on the agent's.

 

[Brady]

Quick note:

A common misperception that many purchasers have is that executor auctions or mortgagee sales are usually bargains. Most often the properties in question are underquoted which in some respects generates a more interest and therefore a competitive environment come auction day. This was the case on Saturday when I attended an auction whereby the quote range was in the low 300's but the property sold under the hammer for more than $400,000.

It's really important that you consider the comparable sales in the area and determine your own price range rather than relying on the agent's.

Great tip!

I purchased property 10% higher at auction then advertised, but had researched comparable sales and new could go 25% higher and still okay.

Sometimes not always that easy to pick up bargin too, as alot of the time there are several people going to benefit from the sale, usually they want to get the maximum value for sale, found lots get valuations and wont sell undervalued.

Goodluck

 

[Jake Milne]

Thanks Brady & well done!

 

[DaveM]

If I was at an executor auction, I would watch out for a large man with a black mask on standing with an axe near a wooden block....

 

[Jake Milne]

Some people lose their heads over auctions :\

 

[ourhouse]

Thank you Aaron and all for your knowledgeable answers.