Selling a home in an estate is always a difficult thing and just one of the many experiences most people go through. However, there are some ways to make it easier to sell a home in an estate that you can do now and later to ensure that your heirs have an easier time selling a home in an estate and planning to sell a home in an Estate.
As a Realtor, I have dealt with many people selling a home in an estate from both the listing agent end and the selling agent end. It can be difficult and complicated and can be a real turn off to buyers, or at the least delay the closing or get you in trouble. Here are a few dos and don’t for selling a home in an estate.
1. Speak with one voice. There is a lot of communication and decisions in selling a home. The listing agent needs to have one person to speak for the estate and/or heirs. Delays in negotiations and arguments and misunderstandings among varied heirs who have hidden or past agendas and varied knowledge of the market in the area or the circumstances, etc. can prolong and complicate negotiations and information to the point where buyers bail on the deal. Making decisions by committee all over the world does not work.
2. Make sure your title is correct. Very often during the arrangements after a death in the family, attorneys change over the deed, etc. It is important that this is done properly. A closing can be held up or even cancelled if the proper person in the estate has the right to sell and is on deed properly, etc. Get an attorney involved immediately when you decide to sell a home in an estate and have them look into the title and deed to get ahead of any problems before closing, even before contract.
3. Disclosure is required in Illinois. However, there are circumstances where you need to understand when it will or will not apply to you. If you have knowledge of any deficiencies in the house, to protect yourself, it is a good idea to disclose. If it is fixed, you do not have to disclose past problems, only current.
4. Be realistic. Very often heirs either have the get rid of it or $$$$ attitude towards sales. Selling a home in an estate just like any other sale need to be marketable, priced right and appealing. It is a commodity, just like anything else. Personal feelings about the home, how it was built or cared for, should not enter into it. Market value is what someone is willing to pay for it. And remember – markets are different everywhere – so if you are in California or Texas, etc. doesn’t mean it is the same in the local market. A Realtor can tell you the realistic prices and what the costs are to sell a home.
5. Advertise as Estate – pro or con? I usually say no. Sometimes buyer perceptions of selling a home in an estate are not going to get you the fastest sale at the best price. The word “estate” sometimes evokes buyer fears that someone has died in the home. While you do not have to disclose that and while it is not relevant, some people have an issue with that. Don’t ask, don’t tell. Other buyers see “estate” and see “fire” sale. Let the home stand on its own merits.
6. Fix up or leave it. This is a question of all people selling a home. But for estates, I would say, look at your budget. Clean the place up, get rid of dated furniture, personal possessions, lace curtains and just like any other home, ask yourself if this will appeal to your target market. If not, either get a budget to change some or all things or price accordingly to sell. But keep in mind, any repairs should be done to improve sale ability and avoid lending condition issues.
You can avoid these problems ahead of time when you are planning your estate. Here are some simple and inexpensive planning tips from Attorney Joseph A. Macaluso on how to make preparations for your heirs to sell a home in an estate.
By taking advantage of a Transfer on Death Instrument (in Illinois and some other states), you can arrange to have your home transferred to your children on your death without the expense or time delays of Probate Court.
If you or you and your spouse own your home, you can record a Transfer on Death Instrument with your local Recorder of Deeds, which will automatically transfer the home to your children on the death of the last to die of you and your spouse. During the lifetime of either, you or your spouse are free to sell or mortgage your home.
The legal fees to prepare and record the Transfer on Death Instrument are far less expensive and less time consuming than Probating your Estate or some of the other procedures your children would have to follow in order to sell your home after your demise.
You should contact an Estate Planning Attorney to take advantage of this opportunity to both save legal fees and make the process of transferring your home to your children at your death less stressful for your children.
If you have inherited real estate, hopefully your benefactors have followed the advice in the above five paragraphs. If they have recorded a Transfer on Death Instrument, you are now the owner and can easily sell the property if that is your desire.
On the other hand, if there is no such instrument recorded, your course of action depends on how title had been held, and by what method you inherited the property. Some of the possibilities are:
1) Your parent made you a joint tenant on the property by recording a joint tenancy deed. If that is the case, you and any other surviving joint tenants can sell or otherwise deal with the real estate upon presentation of a death certificate and a joint tenancy affidavit.
2) Your parents owned the real estate as beneficiaries of an Illinois (or a few other states) Land Trust. Once again, transfer of the property would not be difficult and would be handled similarly to 1) above. The disadvantage of a Land Trust is that there are yearly fees to the Trustee, and additional fees to transfer the property.
3) Your parent or parents had entered into a Living Trust and have transferred title to the real estate to the Trust. In that event, the successor Trustee under the Living Trust would be able to transfer the property with a copy of the death certificate.
4) Your parents left you the real estate pursuant to the terms of a Last Will and Testament, or they had no will and you are the statutory heir. This is where it becomes more difficult to sell the real estate. In that event, your obvious choices are to a) hire an attorney to open a probate estate with its attendant legal fees and delays, or b) ask the Title Company to accept a bond in lieu of probate. There are additional costs involved in acquiring the bond, depending on how long ago the death occurred.
At any rate, whether your parents did advance planning or not, upon the death of your last parent, you should definitely consult with an attorney so that when and if you decide to sell the property, you will be able to transfer the property to the Buyer with as few problems as possible.