In every family, the unfortunate time comes when a loved one passes and the family needs to sell their loved one's home or land. I have a lot of experience representing both executors and trustees in the sale of estate property and there are a few things I have learned over the years that will make the process smoother for you.
1. If at all possible, deal with the estate attorney who wrote and managed your loved one's will or trust. This will make the process a little smoother to get all the necessary documents. If you cannot locate the attorney, or they are not in the area, then find a good estate attorney to help you navigate all the legal rules and paperwork necessary to ensure who has the actual legal right to transfer the ownership of the property.
2. Gather your documentation- Trust's paperwork, probate paperwork, etc. You will need to present these to the escrow officer once escrow is opened. To prevent delay of the escrow process you need to be sure you can provide this paperwork within a few days of accepting an offer. In case you're curious as to the reason we need this, again, it's only to ensure that the person transferring the ownership of the property actually has the legal right to do so. Having the actual Trust/estate/probate documents protects all parties, including escrow and agents, from an invalid sale.
3. Choose a real estate broker who has experience with estate and/or trust sales. These sales are unique, and sometimes require court confirmation and even overbid process to complete. A broker without this experience will not be able to effectively guide you through the sale process and can even hinder the sale by not requiring the proper terms in the offer to protect the seller and the estate.
4. Once you have expert legal and real estate counsel, then you will want to discuss with your agent what sales price you should set for the home. This is a very key area of the process and in my opinion, one I have seen go very badly for sellers who do not have qualified, experienced agents to aggressively advise the sellers as to the actual market value of the home. It is very (VERY) common for trustees and executors to want the tip top price for the home. I have heard all sorts of reasons but they usually are summarized as heirs who want the biggest inheritance possible and are usually not familiar with the real estate market in the area the property is being sold in. In San Diego for instance, many out of state heirs automatically think all homes should sell for $1million because it's an expensive county. Totally incorrect assumption of course, but hiring an agent who will list the home for whatever value the seller wants is foolish and will actually result in getting much less for the home. The best bet is to get a realistic, firm value on the property (hire an appraiser if you want another opinion) and then market the home just slightly under the market value so that the home will sell quickly, and usually for slightly higher than you listed it for. This saves the heirs time in getting their money and will maximize their return all around because they had less carrying costs in the interim.
5. Evaluate the pros and cons of any upgrades to the home before listing it on the market. Many homes that are estate/trust sales are older, need work, and overall need a facelift. It is important that you determine whether you will be fixing the home to sell as a newly upgraded home or leaving it as-is and selling as a cosmetic fixer or handyman special. There are pros to both of these options, but key is to get your agent to show you comparable sales for both scenarios and see which will actually yield the greatest return. Most times the best bet is to put a fresh coat of paint, new flooring to brighten the home up, clean up the landscaping, and then leave the rest to a new homeowner. The final decision needs to be weighed carefully on the cost of the repairs versus the actual return on that investment. Don't let your HGTV aspirations drive this decision- it needs to be clear cut profit and profit only.
6. As an executor/trustee seller, in the state of California you are exempt from many disclosures. This includes the Transfer Disclosure Statement among many others (unless you are the sole trustee of a revocable trust). HOWEVER, this exemption does not exclude you from disclosing material facts about the property that you actually know about. For instance, if you are selling your parent's home and you know for a fact that they had a major plumbing leak which required extensive repairs and mold remediation, you need to disclose that information to the new buyer because that could impact their decision to complete the sale as well as it is something they should know as a new owner of this home as they go through repairs in the future. Take the time to write out everything you know that is a material fact disclosure to send to the buyer at the closing. Also, the disclosure of a death on the property in California is considered a material fact, but is not required to be disclosed by executor/trustee unless the buyer asks directly if there was a death. Further, the seller only has to disclose for 3 years after the death occurred.
The information contained above is for informational purposes only. In no way is the information presented here to be used as legal advice. It is strongly recommended that you contact an attorney to discuss your probate and trust matters. If you would like to use one of our preferred attorneys, please send Erin an email and a few recommended attorneys will be emailed to you.