How to price a probate house before anyone lets you inside

Question

Roughly a third of probate leads arrive with no interior access at the offer stage. The heir has one key, lives out of state, and wants a number over the phone before spending a weekend flying in. There are three ways to handle it and they cost different things. An investor can price sight unseen at a heavy discount and write in a real inspection window, then renegotiate after getting inside. That wins the conversation early. It also means about half of accepted offers turn into a second negotiation, and heirs who already told their siblings a number tend to take that badly. An investor can refuse to give any number until inside. Cleaner, and there is never a price to walk back. That approach also loses leads to whoever answered the question, and in probate the person who answered first often keeps the relationship. Or an investor can give a range tied to condition, this number if the mechanicals work and this number if they do not, and let the heir say which end sounds right. Heirs who have not seen the house in ten years are wrong in both directions surprisingly often. Standard underwriting practice leans toward holding the number back, yet plenty of operators who do not hold it back are still winning the deals. Curious which one this room actually runs.

megan_doyle15 · Answer

I've done exactly one of these and I gave a range, mostly because I had no idea what the bottom of it should be. The heir told me the furnace was replaced "recently," which turned out to mean 2004. Range saved me, barely.

aliyah_b · Answer

What I'm stuck on is that all three of these assume you know your repair numbers well enough for the spread to mean something. I don't yet. When I price sight unseen I'm guessing at a guess.

So for me the range is the only honest option, and I keep the low end at full gut cost for the square footage in my area, which right now I'm carrying at $55 to $70 a foot for a cosmetic-to-moderate job. If that's wrong somebody please say so, because every number I build sits on it.

wendy_park48 · Answer

Whichever you pick, the language in the contract does more work than the price. Some inspection clauses let the buyer walk for any reason. Others allow renegotiation only for defects discovered and documented within seven days, which is a very different right when the problem is that the basement is full rather than broken. Also check what the contract says about personal property left in the house. Sight unseen pricing usually assumes the estate removes contents, and that assumption often lives nowhere in the document at all. If you are inheriting eleven rooms of furniture, that is a real line item, and the estate may have its own obligations about disposing of it depending on the state.

samantha_ruiz · Answer

I ran sight unseen for my first fifteen or so deals and stopped, and the reason was fallout rate rather than price. About four in ten of my accepted sight unseen offers ended in a renegotiation, and roughly half of those died. Every one that died cost me a relationship with whoever referred it.

Now I give a range with the low end genuinely low and I say out loud on the call that the number will move if the mechanicals are dead. Heirs handle that fine when you say it before they've told the family. They handle it terribly when you say it after.

joe_delgado5 · Answer

I price it sight unseen and I don't renegotiate. If I'm wrong I eat it or I assign it thinner.

That only works because I'm buying in five zip codes I know cold and my sight unseen number is basically land plus a small premium. Outside that box I wouldn't do it. Keystone's fallout numbers are why, and I've had exactly the referral problem he's describing, once, and it cost me an attorney who used to send me two a quarter. Never again on that.

aaron_fitz10 · Answer

Flint, that's the version that holds up, and it's also the version that tells you who probate actually fits. If the discipline is price low enough that you never have to go back, it takes either deep local knowledge or enough volume that one bad file doesn't matter. An operator without either of those is better off quoting the range and accepting fewer wins.

How to price a probate house before anyone lets you inside

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