Estate Selling: What to Know About Selling a Deceased Owners Home

Written by Posted On Thursday, 09 July 2020 07:02
Estate Sales: What You Should Know Estate Sales: What You Should Know

What to Know About an Estate Sale of a Deceased Relative

Are you going to be selling a loved one's home? Dealing with the death of someone close to you is difficult. It could also mean that you need to handle an estate sale if you are named as a beneficiary or executor.

The process of estate selling in these circumstances can be stressful at an already difficult time. The help of an experienced real estate agent or attorney can go along way to making things easier for you if you are struggling with this overwhelming situation. Selling a house after a relative dies can be challenging if you don't have professional help.

Let's review the main things you need to know about selling the home of a loved one after their passing.

Legal Issues

When someone dies, their home will enter a legal process known as probate. This is easier if the person has left a will with listed beneficiaries. If this isn't the case, legal proceedings may be necessary depending on the law in the state concerned.

The court will select an executor if necessary, and this person will be responsible for selling the home at the best price possible. The executor will also have to deal with paying off any debts the person might have had at the time of their death. The sale of the home will be used to cover the outstanding debts, with any money left over being distributed to the beneficiaries.

It is normal for the closest living relative to inherit the property if a will wasn't left by the deceased person. The situation could be different depending on the type of ownership the home was subject to.

Sole Ownership - If the home is only owned by the individual, it is in sole ownership. The property won't be transferred to a new owner after death unless set out in the will.

Joint Ownership - If the home is owned by several people, it is in joint ownership. What happens with the property should be set out in a "rights of survivorship" contract. If this doesn't exist, the share of the property will be divided among the other owners.

Title by Contract - This arrangement allows for the home to be passed to beneficiaries on the death of the owner.

If you are unsure of what the rules are or where you stand, an experienced attorney can provide guidance and establish the situation with property. You will also need an attorney if it turns out you need to go through the legal process for the transfer of the estate.

Clearing Debts

If you are named as the executor of the estate, you need to deal with maintenance costs while you are waiting to sell the property. This could mean paying mortgage payments as well as utilities and any other required expenses during that time.

The home can be sold to cover the costs of any debts, like the mortgage. If the deficits are more significant than the value of the estate, there may be specific rules for which debts should be paid first. Check your state's regulations if you find the estate is insolvent.

Can You Sell the Estate?

If you aren't the executor of the estate, you will need their permission to sell. The deceased person can name both the executor and the beneficiaries of their estate in their will. If these interested parties don't agree on the estate selling, you may have to resort to legal measures.

When preparing for an estate sale, you will need the correct documents. If the death was unexpected, these documents would need to be found before things can progress. Paperwork like the will, and homeowner's insurance policy, will make selling the home more manageable. If this paperwork can't be found, it may be more challenging to sell the house, with more time needed to get everything in order.

Hiring a Top Real Estate Professional

Whether you are doing an estate sale or a traditional one, getting the best real estate agent is a paramount exercise. You want someone who you'll be able to lean on throughout the entire process from start to finish. The best agents will provide advice on everything from getting a moving truck, to a company that can remove junk, to a company that can sell off valuables in the property.

The best agents don't just sell your home but become your fiduciary and confidant throughout the home sale process.

Paying Taxes

Estate taxes may have to be paid when the home is transferred to you. This won't be the case if you are the spouse, however. There are also exclusion limits that could mean that taxes aren't due if the estate is valued below that threshold.

Estate taxes are federal, and the exclusions exemptions through the IRS mean that only very valuable estates need to pay. The exemption is $11,580,000 for 2020, which includes all assets.

More taxes will be due when you then sell the home, and there could be inheritance tax due as well. Inheritance tax can be required in some states, though your relationship to the deceased affects whether you will have to pay this or not.

Final Thoughts on an Estate Sale

Being involved in an estate sale can be complicated, to say the least. It is highly advisable to work with professionals, including a real estate or estate attorney and a local real estate agent who has some experience dealing with estate sale liquidation.

One additional essential point to understand is that the word tag sales are often interchanged with the word "estate sale," which can have different meanings. Obviously, here we have discussed the term estate sale to mean the passing of a relative's home and the subsequent liquidation of the property.

Estate sales, however, can also mean the selling of all the furniture and other possessions in the home. It is essential to understand the distinct differences between these two situations.

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About the author: The above article on estate sales was written by Bill Gassett. Bill is a nationally recognized Real Estate leader who has been helping people buy and sell Metrowest Massachusetts real estate for the past thirty-three plus years. Bill has been one of the top RE/MAX Realtors in New England for the past decade.

In 2018 he was the #1 RE/MAX real estate agent in Massachusetts. His real estate advice has been featured on CNBC, RIS Media, National Association of Realtors, Today.com, Inman News, Placester, Credit Sesame, and others.

Bill covers real estate sales in the following Massachusetts communities: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton and Uxbridge MA.

Reach out for his advice anytime.

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Bill Gassett

One of the top RE/MAX agents in New England over the last decade plus. Providing exceptional real estate services to buyers and sellers in the Metrowest Massachusetts area including the following communities: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton and Uxbridge MA.

See my real estate website at Maximum Real Estate Exposure - one of the most visited real estate sites in Massachusetts.

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