I have been elected to be the executor of an estate that has real estate. Now what do I do?
By Laura Wehnes
When a loved one passes away and has asked you to be the executor of their estate, there are many things that need to be accomplished, and oftentimes the selling of real estate is one of those tasks. In this article, I will take you through what questions you need to answer in order to move forward in this process.
1. When can I sell the property?
Many people think that when a person passes away, they can just start the process of selling a home. Unfortunately, that is not always the case. You will need to find out a few things first.
Is the property in a trust? If it is, you will likely have been named the successor trustee. You will want to check with the estate planning attorney or refer to the trust to make sure that you have the ability to sign. If you do, you are good and can move forward to the next step.
If the property is not in a trust, then you need to find out if there was a beneficiary deed in place. If there is, it would be recorded in the county where the property is located. As your Real Estate agent, I can help get that information for you or you can call a local title company to ask. You will also need to know who the beneficiary is. If you are the beneficiary, then make sure you ask your attorney or CPA about any tax consequences.
If there is not a trust or beneficiary deed in place, the property will have to go through probate. This process takes several months or more. If that is the case, you may not be able to sell the asset or, if you do, the title company will probably be required to hold your proceeds until that process is completed.
2. What are the immediate needs of the property?
What bills do I need to pay? Make sure you find out if there are any liens on the property including mortgages, reverse mortgages, and home equity lines of credit. If you can’t find information on that or are not sure, a title company can help find that information for you.
Are the utilities on? I would always suggest keeping the utilities on through closing. In the winter, that can help prevent frozen pipes and, in the summer, it can prevent mold. When you sell the house, these things help the property show better when it is at a comfortable temperature.
3. Do I need to clean out the house? How do I start?
Here are some questions to get you started with liquidating the personal property in the home.
Are there any items allotted to a specific person or organization? If so, you should have those removed as soon as you can so that it doesn’t become confusing as you have other people in the home to help you.
Are there any items of value that need to be assessed? If there are items in the home that you believe could have significant worth, you may want to consider calling an auction house out to value those things. While they are there, they can also find other things that might make sense to put in an online auction that has national or global exposure. That can help maximize the price that you get for those items.
Depending on how much stuff is left, your next step would be to call an estate sale company. The benefit of having a company do the estate sale is that they will price everything in the home (unless there are things you want to leave for the sale, in which case you need to tell them that ahead of time). At the end of the weekend, they will remove everything that doesn’t sell so the home will be empty and ready to be sold then.
4. The house is empty, and I am ready to sell. What are my options?
Selling the property as-is: If the property has not been updated in several years, has big repairs or TLC and you don’t want to spend time doing those things, you may want to sell the property as-is. The benefit of that is that you do not need to do anything else to the property and you won’t have to do work during the contract process. The downside is that you are going to get a lower price.
Selling the property at market value: In this case, you may consider doing a few things such as repairing anything broken and cleaning up the home. This is good for a home that needs some updating but has been taken care of and you could still move into it. You will get a higher price than you would selling it as-is, but you may have to do some repairs for occupancy or negotiate if things come up during an inspection. This is a good option if we determine that your likely buyer would be an owner occupant as opposed to an investor who needs to have extra equity to be able to make a profit.
Fix up and sell: This option is rarely chosen for an estate, but you could update the home to bring it up to the current styles. You would likely be updating kitchens, bathrooms, flooring, paint, etc. You will get the highest price with this option, but it is going to cost you a significant amount of time and money.
Following these steps can help make the process smoother for you as an estate’s executor and will get you started on your decision-making process. Many of my clients choose to have me go out to the property as they are getting started so we can work through the process together and I can suggest vendors to help you along the way. For help navigating this process, please call us for a consultation.