Selling a probate property is very different from selling a traditional home. The probate process, which involves managing the deceased individual’s affairs, can be intimidating and fairly tricky to understand. As an executor or administrator of an estate, it’s important to understand how the process works, especially when it comes to selling these particular types of real estate.
If you’re in the process of putting a probate property on the market, here are the mistakes to avoid:
- Being unaware of the probate process
Many executors, especially those taking the position for the first time, make the mistake of not knowing what goes on during the probate process. If you’ve been named as the executor of an individual’s will, it’s essential to know how the process works and what it entails. If you’re an executor, you must be familiar with the responsibilities required and the steps that must be taken.
And since the probate process varies from state to state, executors must also be aware of the probate procedures in their respective states.
- Listing the home with an unqualified or inexperienced real estate agent
When it comes to selling a house in probate in California, it’s always best to work with the right professionals. A real estate agent who specializes in probate properties has the necessary knowledge and experience in marketing and selling properties in probate. And since the probate process involves more legal documents and contracts, working with an agent who knows the local probate rules and procedures is a huge advantage.
Before hiring a real estate agent, evaluate their experience with probate properties. Are they certified in probate real estate? How many probate properties have they handled? What sets them apart from other probate real estate agents?
Probate properties couldn’t be DIY-ed as well. Unlike properties sold through FSBO (For Sale By Owner), which can be effectively done solo, a successful probate sale can only be achieved with the help of an experienced probate attorney.
- Selling a probate property without going to court
Being the executor in a will doesn’t automatically give you the authority to sell it. You must first obtain permission from the probate court. If the will doesn’t name an executor, the deceased person’s next of kin is usually appointed.
To ensure your authority to act as the estate’s personal representative, file the will in your local court immediately. Most states have a 10 to 90-day deadline after the death of the decedent or after you are notified of their passing. In California, the will must be filed by the executor within 30 days after learning about the death. Should you file the petition after the deadline, your right to become the estate’s personal representative is waived.
If you have full authority under California’s Independent Administration of Estates Act (IAEA), court approval is not required.
- Neglecting the property’s maintenance
As an executor, taking care of the property is a must. It’s not uncommon for properties to get messy, dusty, and disorganized during the probate process. A delayed probate sale also keeps the house empty for a long period of time. This could lead to costly home repairs and renovations if neglected. Moreover, a poorly-maintained property will only prolong the selling process since buyers rarely look at homes that need a lot of work.
To avoid the home turning into a mess, start the probate process right away and continue the property’s upkeep.
- Skipping the home appraisal
The home appraisal plays a huge role in the selling of probate property, as well. Executors can’t just place any price on a probate estate. The sales price of these properties must be based on an appraisal made on the property. Properties in California, in particular, must sell for least 90% of its appraised value, as per the California Probate Code 10309.
- Handling the real estate disclosures incorrectly
Similar to a regular home sale, sellers of probate properties must also disclose any conditions or material defects that they’re aware of, whether it’s a roof leak or faulty electrical wiring. However, there are some states that exempt the executor or trustee from submitting the real estate disclosure form.
This is the norm in California, where executors, trustees, and administrators are not required to give buyers a Transfer Disclosure Statement. The rationale for this lies in the fact that you are only representing the property. As such, you aren’t expected to know its issues, defects, or even previous repairs. However, it’s highly recommended that disclosure – even just of flaws and defects you know of – be made to your real estate agent to avoid any issues down the road. Talk to your agent about this and see what they can advise.
For more information regarding the probate process and requirements, get in touch with me, Nick Caudillo. I specialize in probate and trust real estate sales in the Los Angeles, San Bernardino, and Riverside areas. Call me today at 626.388.6644 or send an email to nick@91740.info.
