Probate & Trust

Oftentimes there is a significant amount of deferred maintenance on a property that is involved in a probate. If not  properly dealt with, this could have a significant impact on the bottom line proceeds of the sale. If the executor/ administrator does not have experience working with contractors, cleaners, etc. to repair a property and bring it to  selling standard then it would be wise to hire a realtor who does have this experience and has a team of vendors  they work with regularly. Since many times the sales are time sensitive, meaning beneficiaries would like to sell  sooner rather than later, working with someone who has experience in coordinating repairs and improvements  to prepare a property for sale is invaluable in bringing expediency to a sale while still maximizing the sale price.

As described in the Independent Administration of Estates Act (IAEA) the Executor/Administrator will be the one to  establish the listing price. The asking price will take into account the appraisal from the Probate Referee and should  strongly weigh the recommendation of the real estate agent. The way to establish the asking price is to review  comparable sales in the neighborhood within the last six months. Currently, the environment in our market commands  listing prices that are roughly five to ten percent below the projected sales price. The reason for this is to increase  exposure to buyers at different price levels to facilitate receiving multiple offers and encourage a potential bidding war.

The property is listed into the Multiple Listing Service and it is marketed to the public and potential buyers. This period should include multiple open houses and private showings for all interested parties. Depending on which real estate team you choose, the marketing strategy can diff er significantly. When interviewing realtors make sure to find out exactly what type of marketing methods they plan to use, how many open house weekends, and how much money they will be spending on marketing, and make your choice accordingly.

After a reasonable amount of time “on the market” the listing agent will accept offers (an offer acceptance date  is usually scheduled beforehand.) Once offers are received the listing agent will assist the executor in negotiating  price and/or terms of the offers to establish an agreement between a buyer and the seller. Once an offer is  accepted, a Notice of Proposed Action is mailed to all heirs, simply stating the terms of the proposed sale. (An  accepted offer must be 90% or more of the Probate Referee’s appraised value). The heirs have 15 days to review  the notice and pose any objections. If there are no objections then the sale may proceed without a court hearing.

A real estate sale goes into court confirmation when a person dies intestate (has not drafted a will) or without bequeathing their property. Here are some things to keep in mind with a Court Confirmation required probate sale:

• The offer must be written on a Probate Purchase Agreement Form
• A 10% deposit must be presented with the offer. Often times it must be a cashier’s check issued in the name of the decedent’s estate.
• Once offer is accepted it will have a “conditional acceptance” and the time periods for loan, appraisal, and property inspection contingency removals begin at this time.
• The attorney then applies for the court date which is 30-45 days after the application is filed. (Even after a court date has been set, a professional real estate team will continue to market the property aggressively to ensure more exposure and a potentially higher offer amount.)
• On the day of the court hearing another interested party may outbid the previously accepted offer. This person must be present at the hearing and bring a cashiers check for at least 10% of the overbid amount.