Real estate laws can be intricate and tricky, particularly when you’re dealing with an estate in probate. Probate is the legal process that takes place when transferring an estate to a deceased property holder’s beneficiaries. The property enters probate when not willed to a particular beneficiary.
Are you the executor?
An executor of the estate may be required to sell the property. They request permission through the court system. Once the real estate is sold, the probate court splits the earnings from the sale among the beneficiaries. Real estate law in the location of the property requires that strict procedures be followed in selling estates in probate. Selling an estate in probate is a complicated and time-consuming endeavor. Many real estate agents specialize in estates and probates, so secure the help of a qualified professional real estate agent before you proceed.
First Things First
Your first step in selling a property in probate, after securing the assistance of a professional real estate agent and possibly an attorney, is to have the estate appraised by an independent certified appraiser. Your real estate agent will likely have a working relationship with an appraiser you can call on. You will need this appraisal to submit to the courts with your petition to sell the property. The appraisal proves to the courts the value of the estate being sold.
You must obtain permission from the courts to sell the estate. To do this, you submit a petition and the appraisal, as well as stating the methods by which the property will be sold, such as auction, open house, etc. The estate is then in probate.
Your Real Estate Agent Helps
With the help of your real estate agent, you’ll list the property for sale. When a potential buyer makes an offer, you are legally bound to inform them that the sale is contingent on court approval and an open bidding process. When agreed, you buyer should make a 10 percent down payment on the purchase of the home. Your real estate agent can guide you through this sensitive disclosure process with potential buyers.
When you have the confirmed offer and deposit, you must again petition the court for approval of the sale, which could take anywhere from 20 – 40 days.
Following the Rules
Here’s where it gets tricky. Just because the buyer made an offer with a deposit does not mean that buyer will be awarded the property. The sale of the property, along with the offered price, must be advertised in the public newspaper to allow and encourage open bidding at a pre-determined hearing date to ensure the highest price is garnered for the property.
You’ll have to attend the hearing where bidding may or may not take place, as will the potential buyer who made the deposit. If bidding occurs, it begins in $500 increments over the existing offer, and the winner of the of the bid must immediately present a cashier’s check to the court for a deposit against the purchase of the property.
If a new over-bid is accepted, you must return the deposit to the original buyer. Otherwise, that deposit is applied to the purchase price of the house and the original buyer becomes the new owner of the property. The full amount of the property is secured at closing and must be applied to the estate fund, which is to be divided among any beneficiaries.
If you’re in the unfortunate circumstance of being the executor of an estate, do not handle the situation without representation. Your real estate agent is an expert in handling estates in probate. They offer you not only compassion, but also insight and advice based on experience garnered through previous estate/probate transactions.
Above all, be patient. Estates in probate are timely processes designed to protect the interests of all involved. For more information on the probate process, call Asten Realty Team at 703-887-3142.