SELLING A DECEASED RELATIVE'S HOUSE

By
Real Estate Attorney with THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY
https://activerain.com/droplet/58zS

What happens when a home is left to a child or other relative of a deceased parent or uncle or aunt or grandparent?  Who owns the house?  Can the house be sold?  Can the relative use it as their own?

These issues are always present.  The primary part of the issue that most people do not understand is the issue of ownership.  When an owner dies and there is a Last Will and Testament, just being named as the successor heir to the house does not transfer the title to the house.  If the house is to be sold - who sells it?  More specifically, who has the "legal capacity and authority" to sell the house? 

#1 -  You need someone legally authorized to sell a house and sign the deed of transfer to the buyer.  Unless the house was in a trust and the trustee is alive, or the ownership of the house was in joint tenants or a life estate and there is a surviving joint tenant or remainderman, the estate of the decedent will have to be probated.  The probate (also known as the administration of the estate) usually requires an attorney.  In Florida the estate would need to go through formal or summary proceedings.  Most legal proceedings should only cost a few thousand dollars.  Without getting the property into a living person's name could result in problems down the road.  It will have to be done eventually - no exceptions!  The sooner the better.

#2 -  Even to take a listing by a Realtor the listing has to be signed by a person authorized to sell the house.  An heir is not an authorized person until the court has signed a Court Order making someone the owner or authorized person (this later person is usually the Executor or Personal Representative of the Estate).  If an heir is signing a listing agreement it should be qualified (disclosed) that the authority of the person is subject to the court proceeding.  

#3 -  If there are ongoing expenses for the house, like a mortgage, taxes, association fees, service providers like lawn care, etc. - these all need to be serviced.  Mortgages can be a problem.  Upon transfer to the heir, the clause in most mortgages about prohibiting transfers could be activated as a "due on sale".  The borrower, being deceased, is a trigger to the due on sale of the promissory note as well.  If an heir is keeping the property they need to consider refinancing it to pay off the decedent's mortgage.

Every estate situation has some uniqueness to it when considering real estate owned by the decedent.  Doing nothing is simply NOT an option.  Be aware of pitfalls and move quickly to resolve them before they become a major headache.  

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copywrite 2017 Richard P Zaresky Esq.

 

Richard Zaretsky is a Florida Board Certified Real Estate Attorney practicing in West Palm Beach since 1976.  He is Senior Partner of Zaretsky Law Group, a law firm focusing on real estate and business law issues.  Mr. Zaretsky has written dozens of articles on real estate and related law matters.  They can be found at his Table of Contents.

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Rainmaker
4,064,440
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Richard, great information, and we do run into this situation on occasion.  

Dec 02, 2017 06:53 AM #1
Rainmaker
576,879
Gloria Valvasori, Accredited Senior Agent
BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE - Mississauga, ON
REAL Experience | REAL Commitment | REAL Results!

I had this situation last February.  A client's dad passed away suddenly at home.  There was no Will and he was his sole heir.  My client conslulted a lawyer, the home went through probate very quickly...He chose me to lit and sell the home and it was done without a hitch.

Dec 02, 2017 06:59 AM #2
Rainmaker
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Kristin Johnston - REALTOR®
RE/MAX Realty Center - Waukesha, WI
Giving Back With Each Home Sold!

Terrific information....just went through an estate situation myself (daughter in law)

Dec 02, 2017 07:03 AM #3
Rainmaker
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Brad Thomsen
Big Bear Realty - Edmonds, WA
Real Estate Services

Hi Richard,

Great information.

Estate sales and selling a relatives house needs these tips.

Happy Selling!

Brad

Dec 02, 2017 07:04 AM #4
Rainmaker
281,226
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

Good Real Life Stories Joan and Gloria!

Dec 02, 2017 07:04 AM #5
Rainmaker
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William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

I have sold several of these homes over the years.  Set ground rules up front

Dec 02, 2017 09:38 AM #6
Rainmaker
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Mickey Hayward
Sunset Properties, Hayward Realty - Onley, VA
Farm - Land - Home Sales & Commercial Real Estate

Great tips Richard.  Unfortunately, several years ago, I was involved with this very process, involving an extended family member.  We put a lot of time in to help the heirs sell the house but in the end there was a building code issue that was triggered with a change of ownership.  Sadly, the heirs didn't want to deal with it and eventually they let the house go back to the bank.

 

 

 

 

Dec 02, 2017 11:17 AM #7
Rainmaker
778,815
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

Richard, we have date of death deeds here in Indiana and this made the transfer of real estate much more streamlined and helped avoid probate with my mother-in-law's estate. 

I always enjoy reading your blog and the valuable information and challenges you make us aware of on important real estate related topics!!!

Dec 02, 2017 12:32 PM #8
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Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living

Richard, thank you, this is not a topic most people like to think about but it is an important one. All too often, properties are being tied up in probate because there was something that didn't get done while the deceased was still alive.

Dec 02, 2017 01:47 PM #9
Rainer
1,416
cecelia cosgrove

Excellent information.  Just recently I encountered this situation on a listing. The house was not in the name of the presumed heir and no Trust had been established, creating a huge delay in establishing ownership. 

Dec 02, 2017 01:53 PM #10
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Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Richard- If agents are looking for a guest blogger for their blog this would be a good candidate!  I'll bet there are many homeowners who have not addressed this problem but were they to read your post, they would know that they need to consult a qualified real estate attorney. 

Dec 02, 2017 03:52 PM #11
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Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Dec 02, 2017 07:18 PM #12
Rainmaker
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Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Richard. This is important and often unknown. Seek competent advice. Well done.

Dec 03, 2017 06:03 AM #13
Rainmaker
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Debbie Gartner
The Flooring Girl - White Plains, NY
The Flooring Girl & Blog Stylist -Dynamo Marketers

Oh yes, great info.  I've been writing several articles on this topic for one of my clients.  I've been learning all about executor/executrix responsibilities...and mistakes.  My dad has been super helpful on this as he was an estate attorney up until a couple of years ago.  Also, as you mention, the process does differ a bit by state, including the order in which things should be paid when there isn't enough to go around.

Dec 03, 2017 10:38 AM #14
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Richard

Thanks for the information. No doubt things are different here in California but the issues to be considered are similar - who actually owns the house, who can sell it, and so much more. Even with a trust in place there is sometimes an issue with the trustees or successor trustees and their authority, among other issues I have encountered, and the title company needs to get involved.

Jeff

Dec 03, 2017 11:48 AM #15
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Paul S. Henderson, REALTOR®, CRS
RE/MAX Northwest. - Tacoma, WA
Tacoma Washington Agent/Broker & Market Authority!

Boy Richard Zaretsky, I didn't realize there were so many pitfalls in selling a deceased relatives property 

Dec 04, 2017 09:23 PM #16
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

I guess I can say I was lucky and so far did not have to deal with it. But I had no idea  what it entails.                                                                                                                     

Dec 19, 2017 01:43 PM #17
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Richard Zaretsky

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