E301 How the Recession Affects Probate
Economic recession affects probate, just as much as wages, gas, and your grocery bill. We’ll share a few ways we’ve seen how it’s been impacting probates.
How Probate Works. A Guide for Executors, Heirs, and Families.
E298 Is a Cash Buyer Better for Probate Real Estate?
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.
E291 What is a Strong Offer on Probate Real Estate?
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.
E284 Tips for Cleaning Out Deceased’s Home
Here are our tips for cleaning out the decedent’s home and getting it presentable for sale.
E281 MTA Covid Death Benefit and Beneficiaries
Does the MTA covid death benefit have beneficiaries, and if not, who should inherit? The MTA is paying a pretty generous amount (about $500,000) to the estate of any employee who passed away with or from covid. The requirements seem to be tightening up a bit, but we’ll see what comes of it.
E279 How to Sell a New York City Loft in Probate
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.
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.
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
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
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
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:
- 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.
- It is best to have a local executor: someone who understands local laws and customs.
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:
- Take time to choose the broker carefully.
- Make sure they understand probate’s unique risks and priorities.
- You should try to hire an executor with a trusted network of reliable, experienced agents.
- 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
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:
- Make the price too high for the market but make the co-op happy. Then it sits for months.
- 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:
- 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
New Client v3 Free Probate Chapter
"*" indicates required fields
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.”
E272 What Happens to Personal Effects When Someone Dies?
Sometimes the small personal effects can have a big impact. It may be the irreplaceable keys to the loft, the invaluable smartphone, or treasured photos in the wallet.
E269 Business Valuation During Probate
Business valuation is tricky even under the best circumstances. And the probate process adds a few more twists.
E265 Late Probate 40 Years After Death
What happens during a late probate, meaning you don’t begin the probate process until many years after death? In a recent case, we probated an estate 40 years after death. This case study shows just a few problems with late probate.
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