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The #1 Mistake to Avoid in an Estate Sale

Heres what you need to know before selling a residential property that is part of an estate.

Who is authorized to sell real property as a result of a death? The Executor?


Do not assume the heirs know how to handle the sale of Mom and Dads home (real property) after their death. Many heirs think the executor can hire a listing agent and sign all the paperwork necessary to list and sell their parents home but most of the time this is not the case.

Who Needs to Sign the Listing Agreement and the Agreement of Sale?

The executor of an estate is rarely authorized to sell real property. Under Delaware law, the general rule is the title to real estate passes to the beneficiaries/heirs "at the moment of death." This means that immediately upon death, the beneficiaries became the owners of the property. It's as if they were all the named owners in the last deed of record. They should all be signing the listing agreement and the contract. Plus, they will all need to sign the deed at closing.

For instance, if there are 9 listed beneficiaries of the estate, these 9 individuals are the owners of the property. All 9 of them are the Sellers. Absent a power of attorney, they are the only ones with the authority to sign documents related to the sale of the propertyall 9 of them.

The listing agreement and the contract should never list the deceased as the seller. This is a common mistake and misunderstanding, after all, it still shows the deceased as the owner in the tax records. All beneficiaries should be listed as the Seller on all documents and all need to sign.

In most cases, there are no issues. The beneficiaries just sign the deed we present to them even though they never signed the contract. But be aware, the time may come in one of these situations where a named heir or beneficiary who has not signed the contract refuses to cooperate and wont sign the deed at closing. If this ever occurs, the buyer will have absolutely no recourse since that particular owner was never a party to the contract.

For the Property Owner

In writing your will, its very important to determine how you want your real property (real estate) disposed of. If you want your heirs to make that decision as a group, then you dont need to make any special provisions in your will. If, however, you would prefer that the executor be the sole person to dispose of your real property, you should consult with your estate attorney in your state to specifically state this preference in your will. The attorney will know the appropriate language to include in your Last Will and Testament.

For the Executor and Heirs

If you are an heir or the executor you will need to know this information before taking steps to dispose of any real property, i.e., list the property with a REALTOR. If there is no specific language directing the executor to be solely responsible for the disposition of real property, then all heirs need to agree and sign all documents. Your state laws may be different. Check with your estate attorney.

For the Listing Agent

Before listing a property that is part of an estate, you need to understand the terms of the will. It will tell you who needs to sign listings agreements, sellers disclosures, agreements of sale, and all related documents. Just because the executor contacts you to list the property, do not assume the executor can sell the property.

For the Buyer Agent

If you are the buyer agent and your buyers want to make an offer on a property that is part of an estate, you need to further research. When you see Estate or Probate in the Multiple Listing Service, this is your red flag to ask a lot more questions before proceeding with an offer.

For Buyers

If you see a property for sale and you learn it is part of an estate, ask more questions. Dont wait until settlement to learn that there may be an issue preventing the sale and transfer of the property to you.

Active Adults Realty is here to assist and guide both buyers and sellers when it comes time to sell an estate home. Our agents are familiar with the processes and happy to answer your questions. Schedule an appointment to get the conversation started.

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