Sale of house in estate

March 18, 2017 8:21 AM

I'm the executor of an estate, and we are selling the house in the estate. The house is in need of some work and a good candidate for flippers - but not horrible as is. We also have a good real estate agent (not listed yet). How should we best manage this process?

I'm realizing we will be getting offers from flippers. We have met with the agent, and talked prices etc - she's ready to list, but we have not signed an agreement yet. I'm thinking it's best to see what flippers offer first, to avoid her commission... if this does not pan out, then signing the realtor agreement.

Questions:

1. If we take a flipper offer, and have not signed her, who manages the sale process? i.e.. is it smart for me to go through a sale without a representative?

2. If I did go through a sale without a representative, what would I have to do? (I have little knowledge of in and outs of an actual sale - I've always had an agent).

3. The real estate agent knows the area very well - she's been selling the development for 20+ years. Her pricing seemed high to me (yay!)... but I'm not sure how to take it. Looking at comparable house in the development online, I'm seeing lower numbers. Any reason she'd inflate asking price in a pre-sale talk?

4. Any hints on gauging the value of this house?

Any help and advice would be most appreciated. Thanks real estate savvy MeFites!

posted by ecorrocio to Home & Garden (5 answers total)

One issue here is that if you sell your own house as a FSBO (that's For Sale By Owner), if you screw up (and there are many ways to screw up), it's just your own money you are loosing. I don't know anything about being the executor of an estate, but I'm assuming that there is some fiduciary responsibility that goes with that.

It's also possible to get in some legal hot water if you do not have a real estate licence are acting as an agent for a home you do not yourself own. I am not familiar with the laws in your state, but in my state, in general, that is a felony. But perhaps it might depend on what your relation to the former owner was, what the will says, etc... I suggest you not do this without checking with a lawyer who is familiar with estate law and RE law for your state.

One other thing to consider is that if you need to get other relatives to sign off on accepting an offer, it can go more smoothly if you aren't so personally involved in the sale. Personally, while I might be comfortable handling my own property, if there is other family involved I would strongly consider going with an agent simply to stay on good terms with everyone in the long run.

If we take a flipper offer, and have not signed her, who manages the sale process? i.e.. is it smart for me to go through a sale without a representative?

Technically, you would be managing the sale process. In practice, you'll probably be working with a friendly flipper who is going to be happy to help an inexperienced person with things (unless they want to back out of the sale, in that case they won't be helping you hold them to the contract, and they won't be helping you insure you get to keep your earnest money or helping you figure out how to deal with earnest money). Keep in mind that the flipper has very different financial interests and goals than you, and that they really really really aren't the best person to be guiding you, even if they seem really friendly and helpful.


If I did go through a sale without a representative, what would I have to do?

You would have to look for a good book that covers this topic, and also read your state and local laws. This is beyond the scope of askme.

Looking at comparable house in the development online, I'm seeing lower numbers. Any reason she'd inflate asking price in a pre-sale talk?

Ask her.

Any hints on gauging the value of this house?

You can call fee-for-service agent in to do a CMA.

But part of the value of the house has to do with how quickly you want to sell it, whether you are willing to allow a buyer to have inspection contingencies or sell as-is, whether you are willing to do any pre-closing repairs that might be needed for the buyer's mortgage to go through and which of these would really be worth your while, etc. The details of these things for a particular house are one of the things that a good agent can be very helpful with.
posted by yohko at 10:03 AM on March 18, 2017

You need to hire an assessor, who will give you the value of the home as-is. Otherwise, you could be legally liable to the other heirs if you sell below the value it is "worth".
posted by corb at 11:42 AM on March 18, 2017 [1 favorite]

When I had to sell my mom's condo as the Executrix, I hired an Estate Attorney. They then took care of all of the realtor issues for me, while I handled the other loose ends of the estate.

They were more than worth their money, as I would have had no clue on how to proceed, and the chances of me messing it up would have been very high. I'd hire one, if that's possible.
posted by spinifex23 at 1:01 PM on March 18, 2017

Yes, as Executor you have a "Fiduciary Duty" to the beneficiaries. I suggest getting your hands on one of the Nolo Press books (they have several that cover being an Executor and/or Trustee) to get a read on what your responsibilities are. Our library has them in the reference section. I ended up buying a copy.

Fiduciary responsibilities include risk management. Using an agent lowers risk (as does using an Estate/Trust attorney). When I was in your position, the beneficiaries agreed that I should do for an "as-is" sale of my Mom's home, using an agent. The agent knew the local market (and the local flippers), and guided me through several hurdles that would have been costly (on my time and on Executor travel expenses). No regrets.

For value of the house, I suspect you mean "best sale price," but one thing my attorney had me do right away was get an appraisal "for estate purposes" as of time of death. That ended up being required as part of the sales paperwork, but had no bearing on the sales price. The Appraisal may have been a state (CA, in this case) requirement.
posted by dws at 5:11 PM on March 18, 2017 [1 favorite]

Such good information already posted. I sold a house out of Probate 'as is' using a real estate attorney to do all the disclosures and other paperwork (somewhat onerous in California) but cheaper than a RE commission. Consider an appraisal of the property's value as of date of death. Potentially, the 'Estate' could incur a capital gain or loss in the months before the property is sold which might be a taxable event (I am not a tax person). I had a Probate Attorney advising me all the way. And whatever you choose to do is generally subject to approval by the Court.
posted by namret at 7:19 PM on March 18, 2017