A probate sale begins once someone has passed away, even if there is no will in effect at their time of death. If you have a living trust, however, you can bypass the lengthy and costly process of probate fees, which include attorney, court, and arbitrator fees.
In total, these fees can take at least 6% of the overall estate value, whether it's boats, cars, bank savings, retirement funds, securities, personal items, and the real estate itself. However, you can proceed with the actual probate by yourself if that is what you want to do.
The court clerk for your area will give you all of the forms to fill out that you are going to need, with one of them being needed to publish to any and all creditors that will be involved. If real estate is involved in the will of the person who is deceased, the executor may request themselves to be nominated through whichever estate act in place in your state, so the property in the will not have to go through the confirmation process in court.
This will help to save both money and time, as they will list it and sell it like they would any other home. The executor will accept the best offer, then proceed to sign and close the deal when going through the process like any other real estate transaction, but without all requirements for a real estate transfer disclosure.
Although, just as a precaution, the executor or the administrator will need to have any other heir sign a waiver for the notice of the proposed action.
Because of the fact that the courts are involved with probate selling, trust and probate sales have an entirely different vocabulary of their own when compared to regular real estate.
Probate sales also involve multiple contracts and disclosure statements that are never used with types of real estate transactions. If you are buying or selling real property through a probate transaction, then you absolutely must use a real estate agent who has experience with these types of transactions, which include trust sales.
They also must be experienced with the type of language that is used with these transactions, and be able to explain the language to you.
This includes all of the steps and the documentation that come with these types of transactions, as clear communication with probate sales is critically vital.
Typical Steps Explained Further for Probate Buying and Selling Transactions
In the majority of cases, when it comes to probate buying and selling, the decedent's will have named an executor to handle all of the distribution of assets, including any real estate property. However, if the deceased has not named an executor in the will, the executor that is named does not want to handle the real estate, or if there is no will, period, the court will appoint an administrator to handle all of the duties.
The administrator or the executor is in charge when it comes to listing and selling the property, as the sale will not be able to proceed until one has been identified and confirmed. As stated in the Independent Administration of Estates Act, or the IAEA, the executor will establish a listed price for the real estate property, which will take into account the appraisal that will be taken from the probate arbitrator.
This is typically determined through assistance with a real estate agent, who must be experienced when it comes to trust and probate sales. From there, the property is listed for sale with a real estate agent or real estate broker.
The real estate agent then aggressively markets the real estate property to the public to attract the best, obviously the highest, offer, which will involve multiple approaches.
These include newspaper advertising, signage, hosting open houses for any potential buyers and other real estate agents, and listing the property on more than one website for real estate properties.
The real estate agent is also in charge of scheduling all appointments when it comes to showing the property to any interested parties directly inquiring. Even though buyers of trust and probate real estate are probably looking for a bargain, the offers in range can be pretty limited by the court.
An offer that is accepted must be 90%, or even more, of the appraised value by the probate referee. The real estate agent then helps the seller once a buyer has been found in the negotiation of the terms, which must be satisfactory for both the buyer and the seller.
Once the property offer has been accepted, a notice of proposed action is then mailed out to all of the heirs involved, which states all of the terms for the proposed sale. The heirs will then have 15 days to look over the notice themselves and make any objections known.
If no objections are stated, the sale can proceed without needing a court hearing. If the administrator or the executor does not have full independent power under the IAEA, or if an heir has and states an objection over the notice of proposed action, the notice for the sale is then published into a generally distributed newspaper for that area, unless the will states that action cannot be mandated.
The real estate's attorney then makes an application for the confirmation hearing court date once the sale is to be executed, which is usually within 30 to 40 days of the certain date when the application was filed. A copy of the details and the application itself concerning the property are then mailed to all of the interested and participating parties.
The real estate broker, even after there has been a confirmed court date set, will continue to hold showings of the property, and advertise the property to all potential buyers to secure an over-bidder, for the purpose of raising the price of sale.
Once the court confirmation hearing takes place, any previously accepted bid can be overbid by another interested party.
If such a case happens, the party overbidding must be present at the hearing and bring a cashier's check, it cannot be a personal one, with the amount that is totaled over 10% of the minimum price for overbidding, in order to overbid successfully.
The minimum bid is always determined by using a formula of 10% of the beginning $10,000 with an additional 5% of the overall balance for the accepted offer.
If you go with an over-bidder instead of the original buyer, you will have to return the initial deposit that they have made, which should be done as soon as you accept the over-bidder’s offer to avoid any problems and disputes with you as the seller.
However, should there be more than one person present to overbid, the highest bidder will win the real estate property, and will give their cashier's check over to the administrator or the executor.
From there, an escrow account is opened and will close between 30 to 45 days after the court hearing has ended.
Getting Yourself Ready to Hand Over the Keys
Selling a piece of property that was inherited by you from a loved one is never easy, so make sure you take the necessary time you need to clear out all of the belongings and further depersonalize each room.
This process will be a lot harder to do than the actual selling, so it's perfectly fine to take your time. You should also bring in a contractor, plumber, and an electrician to ensure that everything in the house is in perfect order.
If there are problems, make sure that you take care of the updates or repairs before you approve and start any showings to potential buyers. This will help give you a better chance of selling as soon as possible.
If you drag your feet with the depersonalizing process, that is fine, but you can only do so for a limited time. It's better to get this out of the way as soon as possible so you can move on.