You may not think of your REALTOR as a member of your estate planning team, but you ought to. In an interview with our blog team, Steve Rupp, head of Keller Williams’ Zulu Group, shared insights gained through his work in property estate sales. Since 2005, Rupp has been a Seniors Real Estate Specialist, a designation earned through the National Association of Realtors.
Selling real property within an estate is typically a long and involved process, Rupp explains. At Rebecca W. Geyer & Associates, where we have represented estate planning clients throughout central Indiana since 1999, our team agrees – estate administration is a complicated process involving:
- gathering property
- distributing assets
- paying remaining debts
- making sure the deceased’s last wishes are granted in terms of their property and
possessions
Steve Rupp clarifies how things work after a homeowner has passed:
- After the owner dies, the estate administrator either hires an appraiser or works with a REALTOR to arrive at a date-of-death Fair Market Valuation. Whether heirs decide to sell the home or not, this appraisal or Fair Market Valuation must be completed and the results reported to the court in order to settle the estate.
- If the home is to be sold, a current Fair Market Valuation will be needed. Because, under Indiana law, all estate sales of homes are done on an “as is” basis (with the buyer accepting the home in whatever state it is in at the time it goes on the market), the administrators of the estate may or may not decide to make improvements to the home in an attempt to increase its market value. Steve provides two sample market valuations – an “as is” version that can be compared to an “if improved” valuation.
- Generally speaking, when Steve is engaged by an estate’s personal representative or attorney, the goal is to settle the estate within nine months of the death; he must work swiftly, helping heirs move through the stages of preparing the home for listing.
- First comes a “trash-out”- Personal property must be totally removed from the property Charitable donation, distribution to family members, and disposal of personal property are all options for cleaning out the home. It is also important for the estate administrator to notify the homeowner’s insurance company that the property is now vacant to ensure proper coverage for issues that might arise after the decedent’s death. Next, the estate representative or heirs must decide whether to make improvements to the home, or perhaps just have a deep cleaning of the interior and yard cleaning done, prior to listing it for sale.
- The listing is going to include the words “Estate Sale”, he reminds sellers. Typical buyers of estate homes, Rupp has found, are “book-enders” – either seniors who appreciate the appearance of an older home or Millennials buying their first home before “moving up” to a more expensive home as their family expands. If the house needs a lot of work, an investor may be the ultimate buyer
Steve shares two recent cases in which a near-tragedy turned into a successful estate sale success…..
After Mom’s death, an attorney in the office of the trustee for the estate advised the heirs to sell the home to an interested neighbor, thus bypassing the need to pay a realtor’s fee. The sale to the neighbor fell through, and the children turned to Steve for help. The home was listed, and ended up being sold sooner, and at a higher-than-anticipated price, more than enough to cover the costs of professional help.
Following the death of the owner, the home remained vacant for a time, while the executrix and her brother wrestled with hiring contractors to deal with a water leakage problem. When it was discovered that mold had formed throughout the home, the heirs resolved to raze the structure and sell the property as a vacant lot (a plan that might or might not have gained approval by the city and by the neighborhood association). The pair turned to Steve for advice. Steve put the house on the market, where it fetched $50,000 over the asking price, utterly (and happily) shocking the clients.
At Rebecca W. Geyer & Associates, we agree with this true-tale takeaway:
It’s a good idea to introduce your estate planning attorney to a REALTOR experienced in the estate settlement process!
– by Ronnie of the Rebecca W. Geyer & Associates blog team
