THE ESTATE IN "REAL ESTATE"

     Very often, family members pass away leaving stuff behind.  Often this "stuff" consists of real estate such as a house or land. 

     This isn't an exhaustive article regarding the steps of probate, but rather meant to be information to help prepare you in the event a parent or other relative leaves behind a home or other real estate.

     First, you will be shocked by the amount of opportunity seekers that will approach you seeking to buy the home for a "right now" price which "will not be available tomorrow."  Usually, this will be thousands or tens of thousands too low.  When my father passed away, I received many such offers.  One group of such opportunists are looking for cheap properties to flip, that is, to fix up a little and sell.  

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     What if the property is in great shape, perhaps very well cared for, or better yet, recently renovated?  In this case, there is no reason to deal with any company that contacts you by mail.  If the home is saleable, contact a realtor and list it.  It may take a while longer to sell the home, but it is the ONLY way you are going to get a market price for the home. 

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     I know first hand though, that sometimes the properties are not in great shape.  In that case, it may pay to deal with one of these "sell it now" companies.  But even then, you should get a real estate appraisal so that you know what you have.  How else will you know what a legitimate price is?  You won't know and that is exactly what these opportunists depend on to make a living.  They trust that you won't know the real value of the property and that they can swoop in and practically steal it from you.

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     A realtor has an interest in selling the home.  An opportunists' main interest is in taking value from you by underpaying you to the greatest extent possible.  And, don't expect their initial offer to hold up as they, themselves, actually evaluate the home.  They can and often do take back what appeared to be an actual offer without any remorse and there are no practical consequences for them doing so until you have a commitment is writing.

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     A word of caution, heirs will always want their money NOW.  Often, estate assets are sold to satisfy heirs' desire to have money as soon as possible.  And just as often, the estate will lose money due to the heir's impatience.  

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     If you are the executor of an estate, you owe it to the heirs to get the best value out of the estate.  One way to do that is make sure you get maximum price for any real estate, whatever shape it is in.  Get it appraised.  If it is salable, list it properly with an agent. 

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     If the home is not saleable, please, please, please, at least make sure you have a reasonable idea of the value of the property BEFORE you talk to anyone who has contacted you by mail seeking to buy the property.  Taking the easy and quick way out will almost always cost the estate thousands in value.  

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     And those heirs that pressed you so hard to get them some money? They will turn on a dime to criticize you for letting real estate go for a fraction of its "real" value.

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     If you are an heir, be patient.  Understand that the executor is doing a tough job and usually not getting paid anything for doing it.  Heirs must also realize that the "sell it now" prices offered by bargain seeking opportunists are usually not good for them.  You can make suggestions to the executor, but if you press too hard, the executor is much more likely to make a poor decision and sell important assets of the estate for thousands less than they could have. 

     So, in short, be patient, whether an heir or executor.  Expect a flood of offers from companies seeking to buy the "real" property in the estate.  If you can list the property with a real estate agent, do that first.  Heirs will often look at the tax appraisal to get a general idea of the value of a property.   If the property needs work, get at least an idea of how much so that you can justify it when you have to accept an offer under the tax appraised value.  

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It is important for all to know that an Executor has no duty to do any repairs or rehabilitation to any property.   Their job is not to manage the property for the benefit of heirs. The duty an Executor does have is to try to get the most out of the estate as it currently exists.  That means having a good idea of what a property is worth and likely maintaining the property until it can be sold.

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     Good luck.  Realize going in, that you will probably never be fully satisfied that you got the very best value out of a piece of real estate as it is such a subjective thing.   Sentimentality often plays a role in our over-valuing of assets.  But if you tried, and did your legwork, you can be satisfied that you did your best and the value of that cannot be underestimated.