Selling Property in Probate
Often the person managing an estate for someone who recently died also must deal with selling that person’s home, rental property, or land. There are many issues that come with selling property in probate cases that require care.
Inventory, Cleaning Up and Repairs
First, it is the estate representative’s job to inventory all items in the house. A detailed inventory of every single item is not always required. Items can be grouped together like “clothes” “kitchenware” and “furniture.” The estate representative must take pictures the first time they enter the property and safeguard all high value items, firearms, jewelry, etc. Creating an inventory of items is also incredibly important if the cause of death is in question for legal or insurance reasons.
It is also important to know what repairs the property needs because different lenders have different loan conditions that can delay a sale or unreasonably reduce the selling price of the property.
The estate representative is a fiduciary and therefore must know the value of the house before selling the property. The representative cannot guess or rely on a realtor for this valuation because the property is part of a court process (the probate). Realtors are not licensed to give an appraisal of the house, only appraisers are. Appraisals usually cost around $800. Only if all beneficiaries of the estate agree can the estate representative avoid obtaining an appraisal.
It is common to have a property in a probate case be subject to foreclosure if it took time to file the probate or if the decedent failed to pay the mortgage payments before his/her death.
Normally, when a property is listed for sale publicly, time is given for appraisals, time is given for inspections, and a title department is used for the closing. However, if a foreclosure is going to happen soon, it is common to sell property to real estate investors to avoid a short sale at a foreclosure. This process is also common when there is a foreclosure and squatters in the property. Evictions can take more than 3 months and could push the estate property into a foreclosure. In this circumstance it is common to work with real estate investors to sell the property for a smaller amount to avoid a total loss of estate assets/value when there are practically no other options.
If you have questions regarding selling property in probate, contact Rossi Law today!