Losing a loved one is difficult. Adding “selling a house in probate” to the list of things to do after your loved one has passed, can make it even more difficult. While the probate process may seem complex, gaining a good understanding of the process and taking it to step by step will make things go more smoothly. Here are seven tips on how to sell a house in probate, from learning the probate process to putting your probate property on the market.
Understand the Process
Probate is a process supervised by the court to administer the arrangement of a deceased person’s estate, which includes the selling of their home. The purpose of probate is to ensure the right people are granted the right and responsibility of the estate in question and to ensure that the deceased person’s debts are paid.
If there is a valid last will and testament, probate will consist of proving that the will is legally valid, executing its directions and paying any applicable taxes on the estate. However, sometimes the will may not be valid or have the information needed to name an executor, and the process can become a bit more complicated. It’s highly advisable to consult a probate attorney if you find yourself in this situation. The steps of probate include the following:
- File the will with the probate court – There’s often a timeline to adhere to (30 days in many states), so make sure you file accordingly.
- Know the probate timeline – This is where an attorney will really come in handy; you’ll need to manage multiple deadlines, documents, forms and paperwork and understand certain rules and regulations once the probate begins.
- Get named as executor of the estate – The court will confirm someone as an executor (sometimes call personal representative) of the estate. This person will then receive letters testamentary, which is the documentation that will allow them to make transactions on behalf of the estate.
- Hire a real estate agent – It’s important to find the right agent to help you sell a probate house. Interview your agent to understand if they have the right experience to help you properly. This is no ordinary real estate transaction, and the right agent will know the probate property sale procedures inside and out.
Doing Basic Maintenance
While probate is a lengthy process, it’s recommended that you sell your house in probate as soon as possible. An empty house can accumulate needed repairs and cost you more money the longer it sits. Additionally, you’ll have to pay mortgage, utilities, insurance, taxes, etc, which can add up quickly.
Note that sometimes probate can take years to settle, however some states have adopted Uniform Probate Code which is a modernized version of probate that streamlines the process. Additionally, some states have their own legislation that shortens probate, like California’s Independent Administration of Estates Act (IAEA).
Another reason selling real estate in probate typically takes longer to finalize is the executor may attempt to sell the property as-is. Many executors are ready to get the home sold as quickly as possible, neglecting any upkeep, repairs or modifications that may be needed. This can essentially prolong the amount of time a house stays on the market. If there is money in the estate, it’s wise to invest in addressing any property repairs or improvements before listing, as it may really shave some idle market time off your probate property.
If there is estate money in bank accounts or smaller assets that can be sold, it could be financially beneficial to put some time and investment into fixing up the property. However, running the numbers with a professional will help you really know what route makes the most sense for you and your situation. A large part of this is knowing exactly what assets and liabilities are tied up in the estate.
Choose an Estate Planning Lawyer
When selling a house in probate, it’s extremely advisable to hire a real estate attorney to help you through the process. Going at this complicated task alone is something you don’t have to (and shouldn’t) do. Here are a few things a real estate attorney can help you do when selling a home in probate:
- Understand your state’s timelines, regulations and rules
- Navigate any legal challenges and potential litigation that may arise pertaining to the validity of the will
- Interpret your state’s probate codes and intestate succession
- Advise you through the probate process
- Assist with filing required documentation and paperwork needed, according to deadlines
- Locate all of your loved one’s assets, which may include tracking down hidden assets
- Determine if any estate or inheritance taxes are due, and making sure those debts are paid in full
- Reject creditor claims that may not be valid
- Prepare and file tax returns and other documents
- Resolve any tax issues
- Distribute the estate, as needed
The Right Marketing Strategy for Selling Real Estate in Probate
Once you have an experienced real estate agent to help put the property on the market, you can establish a marketing strategy to reach more people who want to buy probate property.
As with any real estate, you’ll need to engage in some marketing to find a buyer. Your agent and attorney will help you create the right marketing strategy for your property. Some tactics you might try are listed below:
- Have a photographer come in to take quality photos of the property; bonus points for virtual tours!
- List your property with high-quality photos on local Multiple Listing Services (MLS), which your Realtor will have access to.
- Put up professional real estate signs and lock boxes for drive-by exposure and easy Realtor/potential buyer access.
- List the property on websites like Realtor.com, Zillow and Trulia.
- Work with your real estate agent and attorney to explore additional tactics that could increase the exposure of your property, as well as increase the bids.
Some Legal Advice
The best legal advice to follow is hiring a real estate attorney in the beginning of the process. Probate can be complex, time-consuming, tedious and overwhelming. Having an attorney to help you navigate the rules, regulations and deadlines of probate will simplify and streamline the process, as well as keep you out of any legal hot water.
Outside of hiring an attorney, ensure that you are following all court timelines and keeping up with all paperwork. We recommend having a dedicated notebook or folder to keep all paperwork organized and easily accessible. One of the first steps in probate is understanding if there is a valid will. Note that the probate process will be different depending on whether a legally valid will exists. If a will does exist, it makes the process easier. However with existing wills, there are a number of reasons that it may be challenged, including any perceived lack of testamentary capacity, existence of an additional will, missing state-mandated provisions, etc. If the will of your loved one is questioned, an attorney can help you iron things out.
If there is no legally valid will, the estate will be distributed based on the intestacy laws of the state where the property resides. Note that intestacy laws vary by state. In the case of no will, a probate attorney can assist the administrator of the estate and distribute estate assets according to the state.
Save Your Money
While probate can be an expensive and extensive process, there are things you can do to save money. The first step to saving money during probate is to cancel any home-related services and subscriptions, like cable and telephone services. Another way to save money is to hire an attorney who can help you navigate taxes and find any hidden assets. Understanding exactly what assets and liabilities the estate has is a vital step in saving as much money as possible during this process. Lastly, getting the probate property off the market as soon as possible will help conserve funds.
While you will likely have to spend some money, depending on your specific situation, understanding your role as executor, using common sense and working with professionals will save you a lot of dollars in the end.
The probate process can be long and arduous. Patience is key. The property in probate will ultimately be transferred according to your state’s laws, and working step by step is the only way to get there. You’ll need to exercise patience throughout the whole process, and that is especially true for finding a buyer. Note that you’ll need to find a buyer who is prepared to wait, as there will be some delay in transaction while awaiting the court’s approval.
Your listing agent should set appropriate expectations with the buyer from the beginning to ensure a buyer is secured the first time. The last thing you want when you see the light at the end of the tunnel is to have to start over after going through court approval because the buyer fell through and wasn’t clear on expectations from the beginning. Essentially, being patient during the process will make it easier and quicker to transfer your probate property.
In conclusion, selling real estate in probate requires specialized knowledge and a lot of tedious paperwork and tasks. While time-consuming, it’s not impossible. Following our seven steps will ensure that your probate situation is resolved as quickly, efficiently and smoothly as possible. Success is about how much you understand your situation as it relates to your state’s probate laws, communicating with the right professionals, knowing how to sell and market the property and exercising patience.
If you are about to face selling a house after the death of a parent or loved one, know you are not alone. It’s an unfortunate, saddening situation that does have a resolution. There’s an end in sight, and employing the above tips will get you there faster.