August 15, 2019 Words by The CREM Group
When should I consider a probate Realtor?
When someone passes away without a trust, his or her estate will typically go through a process called “probate.” Probate is a court-supervised process that is required to legally transfer ownership of a decedent’s property to his or her heirs/beneficiaries. This processusually takes a year or more to complete. The “personal representative”of the estate (i.e. the person designated to administer the estate during probate) may choose to sell some or all of the real property in the estate during the probate period.In these situations, it is prudent to hire a “probate Realtor” to represent the estate in the sale of the real property. Alternatively, if you are person looking to buy a property that is owned by an estate going through probate (i.e. a probate sale), it is also wise to consider consulting a probate Realtor.
Why should I consider a probate Realtor?
Selling probate real estate, like most specialties, involve subtle nuances from selling real estate under normal circumstancesduring a standard sale. For instance, probate sales: require different contracts/terms, have unique rules for timing and pricing, require “notice”actions at different stages of the sale, and in some cases, require court hearings to confirm the sale. The degree of differences involved in the probate real estate process really depends on whether the Personal Representative is appointed with Full Authority or Limited Authority under the Independent Administration of Estates Act. Nonetheless, a good probate Realtor will fully understand the actions required in each. The other main reason for needing to work with a qualified probate Realtor is that he or she can save significant time and money for the estate. For example, a probate attorney’s fees are dictated by state statute asthey are paid a predetermined percentage of the estate. However, probate attorneys are also allowed to charge “extraordinary” attorneys fees, in some cases, in addition to their statutory fees. Conversely, a Realtor inexperienced in probate sales can cost the estate significant time and money, which is ultimately time and money wasted for the beneficiaries. “Extraordinary” attorneys fees can and will be charged to the estate for services rendered that fall outside the scope of a regular probate. For example, such extraordinary fees are merited for legal services in connection with the sale of a decedent's real property. So you can see how additional guidance and coaching of a Realtor by a probate attorney during the transaction is not the best use of resources by the estate (especially when most attorneys charge between $250-$450 per hour).
How should I determine which probate Realtor to use?
There are a few important things to look for and specific questions to ask when finding and interviewing a probate Realtor. First off, the easiest way to find a good probate Realtor is go online and search things like “probate realtor + name of the city or state” or you can ask your probate attorney if he or she can refer you to one. Next, I would look at the probate Realtor’s website; it should be very clear whether the Realtor specializes in the sale of property involved in Probate. Next, I would recommend a face-to-face (physically or online) interview with the probate Realtor(s). During the interview I suggest asking the following questions:
- How long have you been selling probate real estate?
- a. I would like to see 3+ years to feel confident the agent has experienced enough of the issues that commonly arise.
- How many probate sales have you completed in the previous 12 months? Limited authority vs full authority, depending on the type of sale you need?
- a. I would hope they are selling at least 6 per year.
- What percentage of probate sales make up your total real estate sales business?
- a. 50% or more signifies probate sales is the majority of their focus.
- What are some of the nuances of selling probate real estate (vs. real estate in general)?
- a. See the above paragraph:“Why should I consider a probate Realtor?"
- Have you worked with my probate attorney before?
- a. Not a necessity but giving some other names of attorneys they’ve worked with would be a positive.
- Would you mind sending me the MLS listing printout of your last 3 probate sales?
- a. The dates should line up with the answer to question #2. And these listings should clearly identify the sale as a "probate sale."