In some ways, it’s easier to list the home of someone who has passed away or moved to a care facility: No worries about timing your showings around their schedule, and staging stays untouched.
But if you are not prepared, these deals can also be very emotional and complicated. To set yourself up for success when listing an estate or probate property, get answers to these questions first:
1. Is the property owned individually, or is it in a trust?
If the property is in a trust, things should move along smoothly, as all arrangements were spelled out in that document. In this case, trustees are responsible for ensuring that the terms of the trust are followed and will work with legal and financial professionals to transfer ownership.
On the other hand, if an individual owns it, the process can get more complicated, especially if the individual is deceased. When this happens, the property is typically transferred through the probate process, which can be time-consuming and expensive. This involves reviewing the will, inventorying assets, and paying any outstanding debts before the remaining assets are distributed to beneficiaries.
2. Who has decision-making power?
This is Real Estate 101, but it’s even more important with estate and probate property.
A person can have decision-making power without having signature power, as in the case of adult siblings of deceased parents. One of the children may be the signer, but if the others don’t believe the signer has acted in good faith, they can sue that sibling.
Since there could be several key players with decision-making power, it’s crucial to understand the specific circumstances of the estate and probate property, as well as the laws in your market.
3. Who has signature power?
Usually, only one or two people have signature power in an estate situation, but it can be as many as half a dozen (think siblings).
Make sure you have reliable contact information from each signer so that when it’s time to sign, there are no delays. It’s also important to understand the responsibilities of each signer and to communicate clearly with them throughout the process.
4. If the owner is living and is a signer, has anyone else also been given POA?
If the property is living and is a signer, it is possible they may have given someone else power of attorney (POA) to sign legal documents on their behalf.
Often, an elderly person will give their attorney or trusted family member POA, but it doesn’t mean they have to be the one who signs things. Find out from the client who they want to have sign each document.
5. If the owner is living but overwhelmed, is there a trusted family member that can support them during the selling process?
When an older person is tasked with selling a home they’ve probably lived in for decades, the mental and emotional toll can be too much to handle everything on their own. They often benefit from having someone with them to listen, ask questions, and explain things they might have missed in an important conversation.
6. Who is in charge of property maintenance and lawn care if the property is vacant?
Unless you like shoveling snow, find out right away what the expectations are about property maintenance on a vacant property. It’s important that the house stay in good shape through the selling period.
7. If the property is not in a trust and must go through probate, who is the Personal Representative?
This will be your point person for the sale, so make sure you have all their contact information and stay in communication with them.
8. Does the Personal Representative have the license to sell? If not, when is that expected?
Probate is a public sorting out of one’s affairs after death. Part of that process is to authorize someone to sell the house. This is not automatic, as it needs to go through the proper local, state, and federal processes. It can take months.
9. Will the estate attorney also be handling the conveyance?
Many estate attorneys, especially in solo practice, are a little rusty when it comes to managing the conveyance of real estate, though many still will do it.
Others will be more than happy to pass the real estate part of the job to an attorney who specializes in real estate, especially if the estate attorney is in another state.
10. If so, are they charging the client a flat fee or an hourly rate?
Real estate conveyance attorneys typically charge a flat fee for their services, whereas an estate attorney charges by the hour (or quarter-hour!). Know which one it is before you call their attorney and drive up their legal bills.
Listing an estate or probate property can be a complex process that requires careful consideration of legal and financial issues. As a real estate professional, knowing the answers to these questions is critical.
By understanding the unique circumstances of the estate or probate property, you can work with everyone involved to ensure a successful sale.