If you’ve inherited an NYC co-op and you don’t live in the area (or, if you’re a New Yorker and you already know what a headache co-ops can be), you may want to consider hiring a local professional executor
If you’re a realtor, there’s a good chance that you will (or perhaps already have) run into a property that belonged to someone who is now deceased, whose heirs are selling the home in probate. When that day comes, what will you need to know? What makes a probate sale different from any other real estate transaction?
There is no legal time limit to transfer real estate after death. It could happen quickly, or it could take years. We’ve seen cases where the real estate doesn’t get transferred until generations later. A fast sale is ideal, because problems can emerge in the meantime. There is a lag between the date of death and when the executor gets legal authority to handle the property. So, even “fast” isn’t very fast.
When someone dies, many folks are confused about who owns the house during probate, right after the death. Technically, the heirs own it immediately upon death, subject to debts and taxes of the estate. But, sometimes is not clear who the heirs are. The probate process decides who exactly are the heirs and places an executor in charge to sort out all those debts and taxes.
Should you look for a broker or lawyer first when selling a probate property? With non-probate home sales, brokers are the first to list, set an open house, and find a great buyer. Lawyers only get involved once a buyer is in place and a deal is struck. The lawyer then drafts the contract and conducts the closing.
But with probate, talking to a lawyer first makes more sense. Here’s why:
It’s important to talk with a probate lawyer, because you need to know who has the authority to sell the home. The lawyer can also tell you whether the estate needs to be probated. Not every estate needs probate: maybe the house is titled a certain way or it is held in a trust. Or, maybe you live in an area where the title company accepts “heirs at law” affidavits. These situations are best analyzed by a probate attorney.
How long will it take to get started? How much will it cost? The answers to these questions will determine what type of broker you will work with.
A probate attorney will walk you through the estate debts, taxes, etc. You may not want to go through the hassle of selling the probate property if there is only a small fraction of the estate left over after debts and taxes.
There are some pre-steps that a probate lawyer (or a good broker) can help with:
Brokers are good at figuring out how much you can reasonably expect to sell the house for. Is there enough value to deal with the mess?
A downside of talking to a broker first is that too often, they are eager to get a new deal but they don’t understand the estate situation. The broker may not realize that the person they are speaking with does not have the legal authority to hire them. At that point, you’ve wasted your time and the broker’s time if you do not have the legal authority to sign a listing agreement, etc.
Sometimes selling probate property does not require a broker. You can avoid the broker’s commission if you sell the home to an heir, a neighbor, or a cash investor. A probate lawyer can advise on this, so it will probably save money to meet with a lawyer first.
We see this happen a lot, so we want to share our tips with anyone who is looking to sell probate property. Meet with a probate lawyer first so that you can get proper guidance. To learn more about probate, check out my book, “How Probate Works,” available on Amazon.
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Sign-up for your free consultation using the form above, and I’ll be happy to email you a free chapter from Anthony’s best-selling book “How Probate Works.”
How do you sell a probate co-op, when the estate has no other cash?
Which offer for probate real estate is better: an experienced investor cash buyer, or an individual financed offer that’s supposedly $80,000 more?
In a recent case, turns out the individual offer was actually more like $30,000 (~3.5%) higher, plus tons of headaches and delays.
We’ll discuss a recent case study of how bad neighbors can harm probate real estate sale, and how to deal with them.
I am the professional executor for an estate with real estate that needs to be sold. During this process, we’ve had a neighbor with complaints.
First, the neighbor blamed our unit for a water leak. He had water damage in his unit, and he thought it was coming from us. Water damage can lead to mold issues, so we took the complaint seriously. We responded immediately and gave him access to a plumber.
The real estate is in a co-op building, which, as we discussed before, are a different animal! In this situation, the co-op manager appreciated our fast response to the problem.
As it turns out, the bad neighbor was blaming us for no reason. It had nothing to do with our unit, and the water issue was completely internal to his unit.
Second, the bad neighbor blamed us for a sudden infestation of bugs in his unit. His theory was that when we cleaned out our unit, something was shaken which caused bugs to move to his unit. We took the complaint seriously again and responded by giving him access to an exterminator of his choosing.
When selling probate real estate, you need to try to get along with the neighbors and building management. Getting off on the wrong foot with building management can make things very difficult for the executor. Even though we felt that the neighbor was not being truthful (as we saw no indication of bugs in our unit), we responded promptly. Again, the co-op manager appreciated our fast response to the problem.
It turns out that the bad neighbor cried wolf again. The neighbor’s hired exterminator was so dismissive of the neighbor’s theory that he didn’t even bother to spray our unit. Even though the cost of spraying would have been low, the exterminator said there was no point.
Despite all of this, the bad neighbor threatened to block our probate sale by lobbying the co-op board to not allow our unit to sell. However, the co-op saw that the neighbor lied twice and that we had been cooperative throughout the process. Thankfully, we did not need to worry about the board preventing our sale.
Those were the last of the complaints, but oddly enough, the bad neighbor sent us a buyer. He suggested selling to someone, so we looked into it. The bad neighbor “vouched” for an “investor,” which is odd because investors usually don’t do well with co-op rules.
The buyer turned out to be an inexperienced kid (late teens, early 20s) who apparently saw on Tik Tok how to flip probate properties. The kid offered a wildly high offer, which is unlikely to actually close at that price. As we’ve discussed before, if a wildly high offer does go through, it’s because the buyer nickel-and-dimes the price down to the asking price. This strategy is used to get the buyer’s foot in the door by making an attractive offer and thus eliminating the competition. (link to E291 What is a Strong Offer on Probate Real Estate?)
In this case, the heirs had been tracking the situation and understood that this buyer was recommended by the bad neighbor. Therefore, they were not bamboozled into demanding that we accept this “high” offer, like they might have been if they did not know the back-story. The bad neighbor actually helped us with this bad buyer. If we didn’t know who sent him, it would have taken more time and research to know to reject the offer.
This is a situation where a professional executor can help buffer and deal with curveballs. An inexperienced executor may get bullied with empty threats of blocking the sale, etc. Professional executors know what to look for and can help the heirs avoid the stress of threats. We continued to address the false alarms and adjusted our treatment of the bad neighbor accordingly.
To learn how a professional executor can help you avoid probate headaches, check out my book, “How to Hire an Executor,” available on Amazon.
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Sign-up for your free consultation using the form above, and I’ll be happy to email you a free chapter from Anthony’s best-selling book “How to Hire an Executor.”
Is the highest offer the strongest offer? Not necessarily, especially in probate. Sometimes an heir or a co-executor believes they can get a higher offer. Then, all things being equal, we should take that offer. However, it’s unusual that two offers are identical. There are other factors to take into account besides the price.
Here are our tips for cleaning out the decedent’s home and getting it presentable for sale.
