Probate transactions are notoriously difficult but can be mastered with the right education and experience
By Annika Tourlas
REALTORS® are often faced with the delicate task of navigating property transactions after an owner’s passing.
While this situation can be daunting and emotionally difficult for families, as a REALTOR®, you have an essential role in ensuring this transaction takes place properly. Knowing what to expect during a probate sale helps both parties approach the process confidently and find success.
“I find it the most rewarding when people need us the most,” says Michele Chiles-Hickman, CRS, sales agent at Berkshire Hathaway HomeService in Montclair, New Jersey. “So, the more complicated it is, the more rewarding it’s going to be because people really feel like they couldn’t have done it without you.”
What is a probate transaction?
Before a person passes away, their property, cash, investments and more are typically divided among their heirs or beneficiaries as detailed in their will. However, there are times when a will is not present and dividing assets falls into the hands of surviving loved ones or a court.
These assets must be transferred or sold—and this procedure is called probate.
Real estate probate is the process of managing the deceased’s property. Depending on the wishes of the heirs, a REALTOR® assists in a probate sale. The preparation for the sale differs from an average property sale as the REALTOR® must consider the death and the legal processes that come with this type of transaction.
“It can get complicated because you have other parties that are involved in the transaction,” says Tyanne Whitworth, CRS, sales agent at REMAX Elite Realty in Lexington, Kentucky. “The more parties you have involved, the more difficult it is for decisions to be made.”
The legal process for a real estate probate sale varies from state to state. However, a probate court helps oversee the sale, which may extend the timeline as heirs and estate administrators are involved in every step of the process. A probate sale could take a year or more to complete.
Probate preparation
Handling a real estate probate transaction is no easy feat. It requires an understanding of applicable state laws, the intricacies of the probate process and a thorough knowledge of the real estate market.
Probate homes are typically sold in the condition they were left, minus the cleaning and removal of the deceased owner’s items. That means the future buyer can encounter hefty repair costs if the home is left in disarray. Therefore, the REALTOR® must understand the home’s true value when listing it for sale and evaluating offers.
However, one of the most important things to consider in a probate transaction is the emotional state of the surviving loved ones. Communicating with grieving family or friends requires a delicate hand. The mourning process takes time, and handling things like the sale of a house adds stress to the grieving parties. A REALTOR® must understand that it is their job to make the process easier on those close to the deceased so they can continue to mourn in a calm environment.
“The emotions always come into play,” Whitworth says. “But I have found that when they have reached out to me to be their agent, they really rest in knowing that I’m going to take care of them and walk them through that process.”
Other circumstances to watch for are complicated relationships among the heirs or beneficiaries. It’s helpful when the heirs maintain a united front. Yet, differences of opinion frequently complicate and prolong the process.
A REALTOR® must carefully manage the situation to achieve the best outcome for all parties involved.
“It’s generally taking better care of the family that is going through the probate process, and on the buyer side, helping that buyer understand the situation,” says Heidi Hilzendeger, CRS, REALTOR® at Next Home Legendary Properties in Bismarck, North Dakota. “The buyer may not be prepared when there are disagreements among the beneficiaries, which can cause delays.”
With so many details to consider, it’s crucial for any REALTOR® looking to work with executors or heirs navigating a probate sale to be prepared for such a transaction.
Conducting the transaction
Many steps go into selling a house in probate. Various parties handle these steps: a probate court, attorney, executor, real estate agent and more.
“When I started my career about 20 years ago, I handled my first probate session,” says Jose Fernandez, CRS, broker associate at Keller Williams Realty in Pembroke Pines, Florida. “I had no clue what to do. But since, I have dealt with many of these transactions.”
First, an executor is appointed by a probate court. The executor will obtain an appraisal for the property and contact a real estate agent with expertise. Then the selling process begins. The REALTOR® will go through steps both similar to and different from a traditional sale:
1. Request documentation to ensure you have the right to sell
This process is notoriously more complicated than your average sale. Crossing your t’s and dotting your i’s is essential to minimize any potential bumps in the road. A part of that is ensuring you have the right to sell the property. This involves requesting documentation from both the personal representative and the attorney.
2. Continue with normal transaction procedures
The process unfolds like any other sale after you have the right to sell the property. It’s the REALTOR®’s responsibility to analyze comparable homes in the area and review the home appraisal to find a reasonable price. Despite similar procedures, probate requires delicate handling of every matter to avoid further stress for those involved.
3. Hold inspections and conduct possible repairs
Probate homes typically are sold as is. Nevertheless, the heirs may want to make home improvements to boost the sale price and pass inspections. REALTORS® should communicate with the heirs regarding the home’s needs before listing and allowing potential buyers to view the property.
4. List the home
Finally, a REALTOR® lists the home. This follows a similar path as a typical sale but can take longer to complete since the heirs have to approve all matters before agreeing to an offer. REALTORS® need to communicate with potential buyers regarding the potentially lengthy sales process to reduce frustration.
Get familiar with probate
Becoming familiar with probate transactions takes practice and time. The best way to learn is from experience. Luckily, resources are available to help train REALTORS® to become experts in this complex process.
The Residential Real Estate Council offers a Probate Specialist Certification that can add to a REALTOR®’s resume. The program is designed to assist agents in learning the fundamentals of probate so they can communicate and help clients.
“I think knowledge is power,” Fernandez says. “I think in transactions like this that are specialized, there has to be additional knowledge and education.”
Interested in learning more about probate? Enroll for our Probate Specialist Certification today at CRS.com/learn/certificates.
Photo: iStock.com/isma wati/DNY59/filo
