E341 How Long to Transfer Real Estate After Death

E341 How Long to Transfer Real Estate After Death

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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.

How long does it take to get preliminary letters?

How long does it take to get preliminary letters?

The executor does not have full authority over the estate until he gets letters testamentary (or letters of administration) from the court. Preliminary letters give the authority to collect and manage property of the estate. They will not grant authority to distribute property. Preliminary letters are handy for entering the real estate for repairs, etc.

Theoretically, the executor can get preliminary letters within a week. They can be issued same-day in emergency situations. Realistically, getting the letters is a slow process. We’ve had properties with leaks and rodents, and it still took us weeks to get preliminary letters. We called the court daily and filed papers often, and it didn’t move as fast as we needed it to move.

If you have an estate without emergencies, you probably won’t get preliminary letters. If the court takes weeks to respond to emergency petitions, they aren’t going to move any faster for “normal” estates.

How to prevent foreclosure on inherited property

How to prevent foreclosure on inherited property

Undoing a foreclosure proceeding has legal costs and other implications. No one wants to deal with that. To prevent foreclosure, first notify the lender. Even though the mortgage company can’t give you much information without court letters, you should still inform them that you are working on the estate. If the lender doesn’t hear from anyone, they will go right to their foreclosure counsel.

When folks hear the word “foreclosure,” they think of mortgages. Your homeowners’ association or co-op board can also take action, because they aren’t getting paid either. Again, they won’t have the legal authority to work with you. But you can let them know that you are getting preliminary letters.

You should also look up and notify any other potential lien holders. There could be a mechanic’s lien, or a family member with a non-bank mortgage on the property. You might be surprised what a simple letter can do. Let them know that you are working on the estate so that no one else starts a process that is costly to undo.

What to do when property owner dies

There are certain things you can and can’t do without court letters.

What to do when property owner dies

First, you cannot forward the mail. The post office needs legal authority to do that.

You most likely cannot change the locks. Although, this is a gray area. If you are in a managed co-op or homeowners’ association, they will bar you from securing the property. You have a better chance of securing a property that is not managed. If you think it will be a contested probate, don’t change the locks. You can get in big trouble, especially in New York.

You may be able to winterize the property and secure it in other ways. Piled up mail and overgrown grass signal vacancy and can attract thieves or vandals. Even if you don’t have legal authority to clean up the newspapers, the court won’t give you a hard time deterring criminals.

Remember, the property manager may not even live in the same state. Make a relationship with the doorman or superintendent and notify them of the owner’s death. They can keep an eye on the property and let you know if something looks off. Without court letters, you won’t get access to the interior of the property. But, the doorman can let you know of a leak or pests or a problem that affects the nearby units.

Communicate with everyone until you get legal authority from the court to handle the property. Preliminary communication can stop a whole lot of problems from starting.

My book, “How Probate Works,” can help you know what to expect with probate real estate.

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E337 Who Owns a House During Probate

E337 Who Owns a House During Probate?

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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.

So, the heirs own the house, but if it is not clear who the heirs are, then you kind of need to wait to see who really owns it. Understandably, this is a bit confusing. We’ll cover common questions on who owns the property during probate.

Can multiple heirs inherit a house?

Can multiple heirs inherit a house?

Yes, multiple heirs can own the house either by will or deed. As you can imagine, having more than one heir inherit the house leads to a lot of problems.

The most common problem is when one heir lives in the house and won’t leave. Or maybe heirs can’t agree on how to manage the property. And, sometimes one heir wants to keep the property and the rest want to sell it. They might even disagree on how to buy each other out.

These conflicts often lead to a probate sale so everyone can take their share and walk away.

Can the executor sell a house that is in probate?

Can the executor sell a house that is in probate?

Does the executor have the power and authority to sell a house that is in probate? Yes, absolutely. Besides, selling the house is often necessary. Maybe the will instructs the executor to sell the house and divide the proceeds among the heirs. Sometimes the house has to be sold to cover the estate bills/taxes that the bank accounts can’t cover. Or, as mentioned above, the house has to be sold because multiple heirs can’t agree on what to do with the property.

Do all heirs have to agree to sell property?

Do all heirs have to agree to sell property?

Preferably, all the heirs should agree; that would make life easier! But they don’t necessarily have to agree.

If there is a court-appointed executor, then executor can make the impartial decision (if it’s a professional executor and not a family member). If the executor is a family member or one of the heirs, then the decision isn’t really impartial and there is potential for drama.

If multiple heirs are on the deed, then the house is technically not part of probate. If heirs are in conflict about the deed, then there will be expensive court proceedings to either bring the property back into the estate so the executor can decide, or a judicial partition where a judge decides. By the time these expensive court proceedings are over, there might not be much profit.

Naming multiple heirs on a deed is a variant of what we call the “beneficiary problem.”

Probate

We get these questions a lot, so hopefully this helps clear things up for our callers and listeners! To learn more about the ins and outs of probate, check out my book, “How Probate Works,” available on Amazon.

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E328 Hire Lawyer or Broker First When Selling a Probate Property

E328 Hire Lawyer or Broker First When Selling a Probate Property?

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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:

Talk to a probate lawyer first when selling a home

Talk to a probate lawyer first when selling a home

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:

  1. Hiring a title company to confirm who owns the property and check for major judgements or liens.
  2. Talking to co-op management and HOAs to see if there are any red flags.

When to speak with a broker first to sell probate property

When to speak with a broker first to sell probate property

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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E310 How to Sell Cash-Poor Probate Co-ops

E310 How to Sell Cash-Poor Probate Co-ops

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How do you sell a probate co-op, when the estate has no other cash?

Why does the estate need cash? To pay for all the preparations, such as movers to clean out the property, cleaners, contractors for minimum renovations to make the property marketable, and more.

For some houses, cash buyers/investors may be an option. But for other houses and the many co-ops in NYC, it’s not an option.

Sell personal property

Sell personal property

When the estate has no cash or bank accounts, it’s usually because the accounts have named beneficiaries. When the estate only has accounts with named beneficiaries, there’s no operating account for the estate. Beneficiary designations are one of my pet peeves; they usually mess things up rather than solving inheritance problems.

So, the estate has a valuable piece of real estate, but no means to pay for the necessary steps to turn it into cash. Usually, the personal property in the residence is junk. I know someone may value their yard sale treasures or the dining room set that took forever to pick out, but no one else wants it. Antiques and high-end pieces can be sold easily, but generally it’s not worth the cost of running an estate sale for the other personal property.

In this situation, the executor has no choice, so maybe but maybe they can sell enough pieces, jewelry, or anything to raise funds for the estate. Again, not a great situation: you’re essentially asking your executor to conduct a garage sale in hopes of raising enough money to clean out the rest of the junk!

Ask heirs to pay

Ask heirs to pay

Another undesirable option is asking the heirs to pay. The bottom line is that the heirs almost never have available funds. Even if heirs have the funds, they probably don’t want to contribute. Besides, even if one heir funds the estate, it causes imbalance and it is recipe for drama. The one who funds the estate will expect special treatment over the other heirs.

Bridge loans

Bridge loans

A bridge loan is a short-term loan to get you from being illiquid to being able to sell the real estate. Bridge loans are not the same as usurious inheritance funding loans. This is a loan that is secured by the property itself. For that reason, some bridge loans have 0% interest!

So, what’s the catch? There’s lots of paperwork and specific conditions to get a bridge loan. Some loans require you to work with a particular broker or firm. But if that doesn’t bother you and you have no other options, it’s not too bad. Applying for a bridge loan is similar to filling out a mortgage application.

Executor

Those are the not so ideal solutions to selling a cash-poor probate co-op. If you dump this situation on a family member or friend, they probably won’t have nice things to say about you after your death. Hiring a professional executor is a good idea in this situation. To learn more, check out my book, “How to Hire an Executor,” available on Amazon!

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E298 Is a Cash Buyer Better for Probate Real Estate

E298 Is a Cash Buyer Better for Probate Real Estate?

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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.

Nitpicked during buyer’s inspection

Nitpicked during buyer’s inspection

Individual buyers heavily nitpick during inspections. Unlike an investor, the individual buyer is the one who will live in the house. He has a vision of how everything should be for his new home.

This inspection showed some problems, some legitimate and some were very cosmetic. Note that this sale was an as-is contract. It’s an estate sale; take it or leave it!

At the end of the day, the buyer demanded about $20,000 worth of repairs and buyer credits. For some items, he wanted a credit so he could pay to fix it himself. The repairs that he demanded from us added months of delay to the process.

Months equals money out of the estate. Not to mention all the problems that can arise from leaving a home vacant for months. If the roof leaks or a pipe bursts during that time, it is still our problem since the house hasn’t officially been transferred.

Cash buyers will inherit problems

Cash buyers will inherit problems

Cash buyers only care about big problems, except ones that affect title (such as boundary line issues or environmental problems).

But cash buyers are willing to deal with cosmetic problems. Why? Because they usually tear down and rebuild, meaning they will end up fixing those problems anyway. What about large cosmetic problems? Cash buyers have experience and teams that can easily fix cosmetic items. Since they deal with this often, cash buyers are very efficient, and their repair estimates are much lower than an individual buyer who may have to negotiate with a contractor.

Cash buyers close quickly

Cash buyers close quickly

It’s a big deal how long the probate property sits. The longer it sits, the more risk the estate bears. Even if someone trips and falls on our sidewalk while we’re waiting for a buyer, that’s our problem.

In probate real estate, we don’t have weeks of open houses, marketing, etc. In fact, we may not even use a broker, which will save another 6% in broker’s commission (in this case, about $35,000!).

As discussed above, there is no negotiation for repairs with a cash buyer. Similarly, there is less likelihood that we will need to spend months making repairs. The cash buyer just wants to get the deal done, fix the real estate, flip it, and move on to their next investment.

Compare this with choosing an individual buyer. The legal bill will be higher, because you will spend months working on a deal that could have been completed in a couple of weeks with a cash buyer. Instead of spending $1,000 or $2,000 for closing, it could be $5,000 or even $7,000.

In conclusion: the cash buyer is still net less than the individual offer (in our case, about $30,000, or 3.5% of our deal). This estate had 4 heirs, so that comes to $7,500 each.

Was it worth it the months of delays and stress to all involved in the estate? Executors in these situations have to weigh the facts and decide for themselves.

Probate

Real estate can be messy. To learn more about selling probate real estate, check out my book, “How Probate Works,” available on Amazon.

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E296 How to Sell Probate Real Estate with Bad Neighbors

E296 How to Sell Probate Real Estate with Bad Neighbors

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We’ll discuss a recent case study of how bad neighbors can harm probate real estate sale, and how to deal with them.

Bad neighbor blames estate for water leak

Bad neighbor blames estate for water leak

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.

Bad neighbor blames estate for insects

Bad neighbor blames estate for insects

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.

Bad neighbor sends us a “buyer”

Bad neighbor sends us a “buyer”

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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E291 What is a Strong Offer on Probate Real Estate

E291 What is a Strong Offer on Probate Real Estate?

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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.

3 Fs of probate homebuyers

3 Fs of probate homebuyers

We use the 3 Fs to make sure the buyer is a good fit for a probate real estate sale.

  1. Financials

An all-cash offer is the best offer. There is always the risk of a mortgage getting denied. However, some probate properties are well-suited for a traditional mortgage situation.

We also want to see a good, healthy down payment, as well as substantial post-closing funds. In other words, the buyer should have uber financial strength.

  1. Fast

We need to sell fast in probate, but we won’t acquiesce to a bad offer just for speed.

A normal seller who doesn’t like a deal can reject an offer and continue to live in the home. But for an estate, the property is vacant. So, the estate is bleeding cash every month to pay maintenance, utilities, and existing mortgage.

Also, any vacant property will fall into greater disrepair, especially over the winter. One bad winter can lead to much wear and tear. If the owner is alive and living in the home, they would know about a problem and take care of it. Whereas, in a probate property, the executor will have to keep checking in and find time to deal with issues that arise. Long-sitting vacant properties will have less value due to less upkeep.

  1. Flexible

An executor cannot afford the time to handhold a first-time home buyer. The buyer needs to know what they are doing throughout the process. We’re busy working on the estate side of things. For example, we need to get additional court orders if the executor is bonded. We have to get special approval to sell the property, get tax waivers, get approval from the IRS to close the sale, and all sorts of other issues.

Now that the buyer has met the 3 Fs, in what circumstance might we accept the lower offer?

Is this probate homebuyer credible?

We often get investors as buyers for probate properties. Usually, it’s too much of a mess for first time home buyers or first-time renovators. We want to weed out those buyers who just watched a YouTube video on how to flip a house and are looking for a probate steal.

But on the flipside, experienced investors can be a little sneaky trying to get the best deal. There are savvy investors who come in at a pretty aggressive/high offer with the goal of clearing out all the other offers. Then the savvy investor becomes the focus of the negotiation. Once they are the only ones left at the table, they start nickel and diming you down to the price of the next best offer.

Will the probate home sale actually close?

Even if the buyer comes in 15% higher than the next best offer, will their mortgage actually get approved at that amount? Will the co-op or HOA approve the buyer? If we are selling an artist’s loft in Soho, and the buyer is completely unrelated to the fit and culture, they could get rejected. In New York, you can be rejected from buying a co-op for almost any reason except being a protected class under anti-discrimination laws.

Again, savvy investors may make the highest offer, but when they can’t get it negotiated down to their liking, they will bail. This does not mean that you will get to keep their down payment; they will just litigate. It’s not like a traditional buyer whose eggs are all in that basket. These investors have money to let things sit for a few months while they sue you. We avoid those buyers like the plague, because we do not need probate held up and the property still sitting vacant.

Sometimes, an offer is too good to be true. We know enough to see the red flags. Naturally, clients want to know why we may not accept the highest offer. We have to explain carefully to our clients that these types of deals will not close at that offer number.

If you want to learn more about how probate works in general, check out my book, “How Probate Works,” available on Amazon.

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E284 Tips for Cleaning Out Deceased’s Home

E284 Tips for Cleaning Out Deceased’s Home

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Here are our tips for cleaning out the decedent’s home and getting it presentable for sale.

Identify the estate clean-out problems

Identify the estate cleanout problems

For example, did the decedent die recently, or has some time passed? Sometimes folks become ill and move into a facility, leaving their home behind. We often see these homes in disrepair (leaks, mold, gas shut-off, rotting food, etc.). Alternatively, if the decedent was living at home and died suddenly, then there may not be so many issues. Remember, in New York, you won’t be able to get into the house right away after someone passes. You will need to get permission, and that process should be built into your timeline.

Next is the amount of clutter. This depends on the square footage of the home. Was the decedent a hoarder? How much are the heirs taking with them? Whatever the heirs take will reduce the amount you have to clear out.

Lastly, are there property-specific issues? We’ve discussed in the past how New York co-ops are a very unique animal! Lofts can present specific issues, as well. Make sure you take into account elevator access, permission from the Board, etc. when you develop your clean-out plan.

Find the best clean out service for your estate

Find the best clean out service for your estate

There are two types of services: clean-out and cleaning.

Clean-out service means the big, burly dudes who carry out the furniture, etc. A cleaning service provides vacuuming, wiping, dusting, etc.

The best service for an estate situation does it in one shot. Work with a team who is experienced in sizing and estimating the deal and is big enough to provide crew and trucks to handle it in one day. There’s no apartment in New York that can’t be handled in one day with the right team.

We had a recent bad example: GotJunk sent 1 truck and 2 small guys for a 2,500 square foot loft! There was a lot of stuff, and we had to do the clean-out over two days. That’s two days of cost, as well as inconveniencing the other neighbors in the building.

Second, make sure the service is reputable and insured. Buildings will require a COI (Certificate of Insurance); they won’t let anyone in to do the job. Co-ops and neighbors also appreciate well-manned crew. They don’t want bubble wrap and tape littering the halls and elevators. Keeping the common areas clean goes a long way in maintaining the relationship with the neighbors and co-op board.

Lastly, a good clean-out service will get the home broom clean. They not only clear out the junk but actually bring in the broom to clean. We’ve dealt with some clean-out companies who left bits of extension cords and zip-ties and tape on the floors. While it may not be a big deal, it does shift the burden and cost on to the next step: the cleaning service.

How to choose a cleaning service

How to choose a cleaning service

The goal is not to clean the home so someone can move in and eat off the floor. You need to have the home presentable for sale. A sell-able condition may mean different things for different situations.

If you are selling to the typical retail buyer, then you should get the home as pristine as possible. However, if you know the home will only attract investors, broom-cleaning is fine.

If the house situation is borderline toxic, you may need a professional crew. For example, there could be bodily fluids from the decedent’s death. Or maybe the level of mold in the bathroom or kitchen is dangerously high. If you encounter these situations, you can search for a local crime-scene cleaner. It might sound extreme, but they can provide a next-level cleaning service.

As we’ve discussed before, there are a lot of moving parts to the probate process. To dig in deeper, check out my book, “How Probate Works.”

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E279 How to Sell a New York City Loft in Probate

E279 How to Sell a New York City Loft in Probate

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We’ll discuss how to sell a loft in probate. This is yet another type of apartment that is unique to New York. We’ve talked about co-ops in the past, which seem mind-boggling to many people (even New Yorkers).

What is an artist-in-residence?

It is too much to cover in depth, so this is a link from Street Easy, a local real estate blog: https://streeteasy.com/blog/sohos-artist-in-residence-law-101/

To live in a loft that has been converted from commercial use, the buyer is supposed to be an artist who lives in their studio. In other words, a work-living space. Not that many people are professional artists, but buyers may be required to be a “certified” artist.

What is an artist-in-residence

This impacts probate by sorting through paperwork to confirm that the decedent was an artist-in-residence. This requirement also limits your pool of buyers.

There’s a process to get certified as an actual artist by the City of New York. As with any bureaucratic process, apparently there are lots of workarounds. And there must be, because I’ve never seen an actual artist living in these multi-million-dollar lofts. Note that there is an income requirement; you can’t just make finger paintings and declare yourself an artist.

It’s a niche issue, so make sure to work brokers who have deep experience. Otherwise, you will end up wasting a lot of time and limiting the number of potential buyers.

Cleanout: the elevator problem

Many of these were warehouses converted into lofts. That means there is not a traditional lobby with an elevator. The elevator goes directly into the living space. There is a key to each floor, so the elevator won’t randomly go to someone else’s loft.

Cleanout- the elevator problem

While this living situation is cool and unique, it leads to some issues from the executor’s perspective.

For example, when you are using the one elevator that leads to all the floors, you are denying the other residents use of the elevator while you are cleaning out the decedent’s loft. This is not unique to probate; it happens when anyone moves in or out. It’s just one more twist for the executor to deal with.

We experienced an odd situation where we didn’t have the key to the door that led from the elevator to the loft. The locksmith drilled, held the elevator door open with one hand, and then had to undo everything to let someone else on. Then he had to start over again to help us.

The positive side is that these elevators are huge, since the lofts used to be warehouses. You can fill it with stuff and might only need two or three runs before giving the elevator back to the rest of the building.

Unique layouts of New York City loft apartments

Unique layouts of New York City loft apartments

There are no rooms; just a huge open space! You can get an architect and a contractor to put up some walls, but in its raw form, it is just a huge open warehouse floor.

Again, this is not unique to probate, but to anyone selling a loft. You’ll have a narrow set of buyers who are interested in living like that. Executors, since you have many other things to worry about, make sure you are working with a broker who is familiar with selling these lofts.

Lofts are very unique, but plenty of buyers love the space and uniqueness. And as a double-whammy, many of these lofts are co-ops, as well! So, you may deal with extra problems and rules.

To read about various probate-related situations, check out my book, “How Probate Works,” available on Amazon.

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E276 Problems Selling Probate Real Estate Septics, Brokers, and Co-op Listing Prices

E276 Problems Selling Probate Real Estate: Septics, Brokers, and Co-op Listing Prices

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We’ll share 3 recent problems we encountered while selling probate real estate: a bad septic tank, firing a broker, and co-op listing prices. We’ll share these stories with you and add key takeaways for executors and those facing probate.

Septic tank problems in probate

Septic tank problems in probate

Any leak or other problem involving a septic tank is a huge headache. Septic water leaking into the ground soil is an environmental violation.

In our case, a problem appeared during the septic inspection (thankfully it was not a full-blown leak). It required our whole team (me, the other attorney, and the real estate broker) to work together quickly to save the deal by replacing the tank. As we’ve mentioned several times before, selling probate real estate quickly is key. Otherwise, the estate bleeds money while the property sits on the market (not to mention impatient heirs and looming IRS deadlines).

Takeaways:

  1. You need a great team (broker, executor, attorney) who understand probate, the need for speed, and the risks to the executor. These are tough situations that require competent professionals. The team must be able to communicate well and do it quickly.
  2. It is best to have a local executor: someone who understands local laws and customs.

How to fire a real estate agent

How to fire a real estate agent

This situation is never easy, but being an executor is not for someone who avoids conflicts. Speed and risk assessment are two things that are important during probate.

So, if you have a broker that is taking too long to sell, it will anger the heirs. Taking too long to sell also puts the executor at personal risk for the loss of property value. The executor can’t just let it sit and let the bills accumulate.

A real estate agent who is not a good fit may make poor pricing decisions on your behalf. Perhaps the agent is a slow communicator or a poor evaluator of buyers. You don’t want to waste time on buyers who cannot close.

Takeaways:

  1. Take time to choose the broker carefully.
  2. Make sure they understand probate’s unique risks and priorities.
  3. You should try to hire an executor with a trusted network of reliable, experienced agents.
  4. If the executor doesn’t have a specific real estate agent to work with, a savvy executor knows to sign a limited listing agreement so he can get out of it quickly if needed.

Co-op pricing strategy

Co-op pricing strategy

This is kind of NY-centric, since there aren’t a whole lot of co-ops elsewhere.

We’ve talked about why co-ops are a pain for probate, and pricing is one of those reasons. In probate, you want to price aggressively (low) to sell with speed. You wouldn’t want the neighboring unit to sell faster than yours because you wouldn’t come down $10,000. But you don’t want to list too low, because you must get a good value for the heirs.

On top of this balancing act, the co-op adds more complexity: the co-op board must be satisfied with the price, so it can’t be too low. The co-op has the right to reject deals that don’t preserve the value of the building as a whole.

Because of this, co-ops listings can:

  1. Make the price too high for the market but make the co-op happy. Then it sits for months.
  2. Make the price lower and get buyers, only to have them frustratingly rejected by the board over and over. This ends up being a waste of time, and the co-op goes back on the market.

Takeaways:

  1. You need savvy executor who can set realistic expectations for heirs and explain to them that co-ops are just difficult to deal with. In this situation, an executor outside of NY with no knowledge of co-ops would be a huge disadvantage.

We hope these anecdotes were helpful to you. To learn more about how probate works, check out my book, “How Probate Works,” available on Amazon.

Request your free consultation

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