Probate for Realtors: What You Need to Know

Probate for Realtors: What You Need to Know

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?

As an attorney and professional executor, I’ve settled lots of probate estates and worked with many realtors and brokers who were tasked with selling a property that was in the probate process. I’m here to tell you what I’ve learned so you can avoid the common pitfalls.

The #1 Tip I Wish Every Probate Realtor Knew

When it comes to probate real estate, first thing’s first: you need to know who the players are. Who actually owns the property? Are there multiple heirs involved? Who’s the executor of the deceased’s estate? Ultimately, who is in charge and has the power to make decisions—such as the crucial one of hiring you to be the realtor?

It may seem like the answers to these questions should be simple and straightforward, and in many cases they are. But I’ve also worked on situations where the heirs made assumptions about who owned the property and then dove headfirst into the sale process, only to run into huge surprises later. For example, finding out that the person who died didn’t even own the home. Or learning the property had a joint tenancy or tenant-in-common arrangement.

Before you do anything else, talk to an attorney like me who can sit down with you to review the will and property deed and sort out these basic questions. Believe me, it will save you a lot of hassle in the long run. The last thing you want is to find yourself on the brink of a sale only to discover that the sellers you’ve been working with for months don’t even have the authority to call the shots. All your hard work will have been for nothing, and you can kiss that sales commission goodbye.

The Ins and Outs of Probate Real Estate

Pros

The good news for you is that probate sellers are typically very highly motivated. That’s because (usually) no one is living in the property, expenses are piling up, and the heir just wants it off their hands.

Probate sellers aren’t the nonserious sellers who are only interested in testing the market waters and probably going to back out. You know who those people are and what a pain they are to work with. Most heirs have a big financial incentive to offload the property, so they’ll work with you to get the job done as quickly as possible.

The Ins and Outs of Probate Real Estate

Challenges

On the flip side, any time you’re dealing with heirs and families there can be drama and dynamics that make your job more difficult. It doesn’t happen too often, but you’ll want to be watchful.

For example, maybe one of the heirs had been living in the property with the person who passed away and now won’t leave the house, creating an eviction situation. Or maybe you have four kids inheriting and one heir wants to keep the home in the family and buy out the other siblings. Oftentimes that idea turns out to be financially unrealistic for the sibling who wants to buy, and the process gets dragged out needlessly until they finally see the light.

Because probate sales can involve these unexpected challenges, it’s always a smart idea to team up with an attorney who can help you navigate them effectively. That way the property sells quicker, which is a win for everyone involved.

How Does a Probate Sale Actually Work?    

Here’s a quick overview of the process from a realtor’s point of view. For more detail, check out my longer post about how to sell a deceased person’s house.

  1. Confirm who can sell the house.

As soon as you’ve been hired to sell a property whose owner is deceased, confirm who actually has the power to sell the house. As discussed earlier, heirs tend to hire a broker before bringing in an attorney, which can lead to costly mistakes. If the heirs don’t have legal counsel, offer to introduce them to a trusted attorney who can help sort everything out.

  1. Make sure there’s a court-appointed executor.

The court-appointed executor is the person with legal authority to sign the listing agreement, be at the closing, and supervise everything in between. Courts will only deal with a court-appointed executor, so it is imperative to have one in place for a probate sale. As the realtor, you will be working closely with this person, so you need to know who it is.

Getting a court-appointed executor involves obtaining letters testamentary, which are basically court certificates that give the executor the authority to act on the deceased’s behalf. Anyone can be an executor, and estates always have the option to hire a professional like me to lift that burden from the heirs and ensure the sale runs as smoothly as possible.

How Does a Probate Sale Actually Work?

  1. Prepare the home for sale.

The executor is in charge of cleaning the house, making any needed repairs or renovations, and handling other tasks like communicating with co-op boards. As the realtor, you’ll be working hand-in-hand with the executor as they make decisions on how to prepare and show the property. As with any of your clients, it will be essential that you have a solid working relationship with the executor.

How Long Will All of This Take?

It’s important to be aware going in that a probate sale can take a lot longer than your average home sale. Many things can and do happen that slow the process down.

For example, sometimes the court has to approve certain transactions or requires the executor to get a bond after the contract is signed. Sometimes the title agent has to get tax clearances that they normally wouldn’t need.

You’ll need to set realistic expectations with your client up front, and most importantly, not overpromise. I highly recommend working with an experienced executor who can help you set the right expectations with the client from the get-go.

You + A Probate Lawyer = A Dynamic Duo

If you’re selling a deceased person’s property, a good probate lawyer can be one of your most trusted allies. Your combined expertise will turn the two of you into a powerful force that’s able to navigate the many obstacles and delays so common with probate sales—and avoid the easy mistakes. Your client will be so impressed (and grateful) you had the wisdom to bring in this essential member of the team.

If you’d like to chat or refer me to a client, please use the form below to get in touch.

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