If you inherited a property that is currently in probate and If you are in charge of listing it, there are several things you should know before you proceed. A probate sale requires knowledge of the process. In this post, we will briefly clarifying these steps and give you a few tips on how to simplify the transaction.
Court appointment of the executor or administrator of the estate: The decedents usually name the executor in their will. An executor or administrator is the person who has the authority to sell the property. If there is no will, no executor is named, or the executor is unwilling to serve, the court will appoint an administrator. If there is no dispute among the beneficiaries, the attorney will file the Independent Administration of Estates Act (IAEA). The IAEA, enacted in 1987 to streamline probate sales, is a series of laws allowing the personal representative to administer most aspects of the decedent’s estate without court supervision
Preparing the property for sale: In many cases, a property in probate process requires significant amount of maintenance. While it is possible to sell the property "As-Is" without any updates and maintenance, it would significantly affect the sale price. Even small repairs and cosmetic updates can significantly increase the value of the property. It is helpful to hire a real estate agent who has a network of contractors and venders who can help improve the property in a short time.
Property appraisal: An appraisal is prepared by a probate referee. It is then used by the executor or administrator for the property with the assistance of the real estate agent. Your realtor will make price recommendation based on recent comparable sales in the neighborhood. In current seller's market, the property are usually listed below the sale price to attacks multiple offers.
Marketing the property:The first step of marketing the property is to include the property on MLS (multiple listing service). The marketing strategies depend on the your real estate agent, therefore it is important to ask your potential agent about their marketing strategies. These strategies may include open houses, private showing, and most importantly online marketing.
Reviewing offers and negotiations: The listing agent will assist the executor or administrator with negotiating the price and other terms of the contract. In current market, real estate agents usually set an offer due date and will review all offers with the sellers at the same time. After the acceptance of the offer, all heirs are notified of the accepted offer through a Notice of Proposed Action. If an heir objects to the offer, further court confirmation is required to execute the sale. In the case of no objection, the transaction will proceed similar to any other real estate transaction.
Court confirmation and over-bidding: If the probate sale requires court conformation, the accepted offer will be "conditional acceptance". The attorney then applies for the court date, which is 30 to 45 days after the application has been filed. When court confirmation is required, a potential buyer may over-bid the accepted offer. Over-bids need to qualify by meeting a minimum amount set using an over-bid formula. Upon final court confirmation and execution of the sale, escrow is open and the transaction can proceed to close.