The unexpected death of a family member or a loved one is awful.
Sometimes, the deceased will leave behind a will that accounts for everything, including what they want done with their property and who should be in control. This is less common than you think. Only 40% of Americans over the age of 45 have even the most basic plan in place.
Every state has different laws, but one thing will always be the same. The probate court will get involved, appoint an administrator, and give the most power to that person.
The more you know, the easier it will be to complete the probate process.
What Has To Happen First?
If there was no will, there was no executor. If that’s the case, the court has to appoint one. You aren’t allowed to step in and nominate yourself, even if no one wants to contest you.
Even if you’re the deceased’s only child, you do not automatically inherit the property without a will. In the event that this happens, you’ll need to submit the proper forms to the court.
The court will almost always appoint the closest living heir as the executor.
As the executor, you’ll have the biggest say in how all aspects of the estate are handled, including the home and the property will be transferred over to you.
Nothing can happen until the property actually belongs to the executor, so it’s best to get the ball rolling as soon as possible.
What Should I do as the Administrator During the Probate Process?
As the administrator during the probate process, you are responsible for the legal matters of the estate. There are a lot of very important decisions to make. The best thing you can do is make sure every decision you make is an informed one.
1. Understand the Process
Probate starts with filing a petition. If the will already explains who the executor is supposed to be, you can hand the will over to the court.
If there is no will, the named executor is deceased, or the named executor doesn’t want to be the executor, you’ll have to file a petition from scratch. If you and the other heirs can’t agree on who should be the executor, the court can decide.
The court publishes the probate in the newspaper to notify creditors that the family may not be aware of. You’ll need to notify creditors you know about and tell them about the probate.
Next, you’ll have to take an inventory of the entire estate.
This includes personal effects and any assets that can be liquidated (like stocks, bonds, interest, etc.). You can hire an appraiser if you need to.
Once that’s all squared away, the property is then transferred to the administrator. The court will go over claims made by creditors, and decide which ones should be paid. If anything that is leftover is supposed to go into a trust fund, the trusts will then be set up.
You’re free to move things around after the court calls the debts settled.
If a huge debt needs to be paid, the court might take special actions. In some states, the probate courts may require that the home be sold at a certain minimum price to pay those debts. If you’re unaware of your state’s probate codes, you may need to do a little research.
2. Communicate with Your Family
You have some important conversations coming your way. The last thing you need is everyone arguing about what to do during probate. This can cause more than a few arguments and awkward Thanksgiving dinners: other people who feel that they’ve been mistreated during the process may be able to personally sue you, or file claims against the estate.
People are going to be a little upset – that’s normal. Just make sure you’re talking about what you’re going to do before you do it. Don’t make any moves unless everyone is aware. Let your family and the other heirs become a part of the decision process. Don’t leave any room for surprises.
3. Prepare the Home
No matter what you decide to do, the home needs to be prepared. If you want to have an estate sale, sell the property, rent the property, or move another family member in, you have to deal with everything that’s been left behind. Bring a few trusted heirs or family members with you, and go through the home.
Pack things up, and give the house a good cleaning. This may be especially necessary if the individual who owned the home was elderly, ill, or otherwise unable to care for their home. If the home is in bad shape, you may want to fix up the property. If you don’t or you can’t afford to, you still have some options.
What are you going to do with the home?
Now, it’s time to make the big choice.
You need to decide whether to sell, rent, or keep the property. Keeping the property is generally the easiest thing to do. If you or a family member want to move in, it’s as simple as packing and unpacking.
Or, you could keep it for a rental for extra income, or cash out for a large sum of money to cover expenses, debts, etc.
Renting the property may have its perks, especially if you can make some money. Who couldn’t use a little extra money in their wallet at the end of the month? I
f you want to rent the property out yourself, you’ll have to look into becoming a landlord, and take on the responsibility of property management.
If you don’t want the added burden, you can hire a property management company. You’ll be making less in profit, but you’ll also get a free pass on doing a lot of the dirty work.
If you want to sell the house, you can go through a realtor, or an investor. If the house is worth a lot and the area has a fast moving real estate market, it may be worth checking out real estate agents. Just don’t forget they’ll take a commission. If the house sits on the market unsold for a while, the realtor may suggest reducing the price, but their commission will stay the same. With an investor, you may be getting less than what the home is worth. This has some distinct advantages.
How to Sell Your House in Probate
The administrator is the one responsible for making the decision to sell the probate property. If there’s multiple heirs, the other heirs have to be involved in the sale process.
This is because the funds from selling the home go directly into the estate, and the total value of the estate affects every heir. The court manages this process to make sure that everyone is informed.
The court handling the estate will be involved with the sale process most of the time.
How much control does the court have?
Depending on where you live, it may be possible to bypass the court, allowing you to do things the way you want. You might be able settle the estate and get the property out of probate without help. When all of the heirs agree, there’s no reason to get the court involved. Just make sure you’re aware of the probate laws in your state.
If you can’t avoid the court, or you need to sell the home while it’s still in probate, you’ll have to play by the court’s rules and require their approval. The court is going to want to get an appraisal, and they’re going to tell you how the home should be listed.
This usually involves aggressive advertisement and publishing the sale of the home in major local newspapers. The court can also approve or deny appraisals, and determine a minimum sale price.
What can I sell my home for?
The court is acting in the best interest of the deceased when it comes to settling the estate. This means that they want the home appraised correctly, and they won’t allow the home to sell for less than 90% of its appraisal value.
The executor is responsible for finding an approved appraiser to inspect the property and determine its value. If the executor cannot do this, the court will take on that responsibility. The court will give you a real estate agent, who is responsible for handling the sale.
The bidding starts at 90% of the appraisal value. Potential buyers will start putting in their offers.
Like in any auction, the home goes to the highest bidder.
The winning bidder will present the court with a deposit check, and that check will then become part of the estate. The court can use the check to pay estate expenses, and fulfill debts or allotments as per the estate’s requirements.
What if the house is in bad condition?
If the house is in bad shape, it may be difficult to find a buyer. Houses in bad shape, especially if there is significant structural damage involved, will appraise very low. The probate court wants the highest offer possible, but properties that are undesirable don’t draw up much attention.
A real estate agent may not be able to market them, and this makes the sale process difficult.
Are there advantages of selling to an Investor over a Realtor?
Sometimes, selling the home fast for cash is really the best way to do things. It closes probate quicker, and it’s always a guaranteed sale.
Other times, it isn’t.
A realtor may be able to do a better job – especially if the house is in good condition and the market is in your favor. Investors on the other hand, will buy great properties like these, but won’t be able to guarantee the 90% of the appraised value.
In all truthfulness, Investors are better suited for people in a hurry, especially if the property involved needs a lot of work or can’t sell easily on the market.
Are you looking to sell a home in probate? The St. Louis Realty Advisors team can help. We purchase properties in cash and can close on a sale in as little as 5 days. Give us a call at 314-270-1601 today to learn more.