What Agents Should Ask Clients Selling Property out of an Estate

Questions to Ask your Clients When Selling Estate Properties

One of the most frequent questions I receive as a real estate attorney is how a seller should be listed on a contract when the property is being sold from an estate. When property is being sold from an estate and not from an individual, it can present a challenge for the attorney and agents, mainly due to the extra pieces and process involved.

Real estate attorneys will always have to review the title work and estate documents to ensure that the property is clear to be sold and the documents are being signed by the correct people. Below is a list of questions that clients can be asked upfront to make the closing process more efficient and to prepare the client for the documentation they may have to provide prior to closing.

  1. How long has the owner been deceased?
  2. This question is mainly to gauge how likely it is that the estate has been opened and if there has been time to officially appoint the Personal Representative. It is also a good indicator of where in the creditor claim process an estate may be and how far along the probate process has come.

  3. Has an estate file been opened in the state where the property is located or another state
  4. When someone owns property in one state but lives in another, it is more likely that their estate will be opened in the state they lived in at the time of their death. In order to sell property located in a different state, the Personal Representative will have to receive authority by going through ancillary administration. This is an abbreviated version of the estate process in the state where the property is located so that the Personal Representative can dispose of property owned in that state.

  5. Who is the Personal Representative (PR)
  6. If someone dies and has a valid will, their Personal Representative is typically named in that document. If someone dies without a will, their Personal Representative will likely be their spouse, or adult child, parent or sibling, but anyone can be appointed as PR. Whether there is a will or not, the Personal Representative has to be duly appointed and will be issued letters of appointment in the probate process once the estate has been opened. A person cannot sign as Personal Representative of the Estate unless they provide that documentation.

  7. Is an estate attorney involved?
  8. Having an attorney represent you for an estate is not a requirement. It is, however, highly recommended that the Personal Representative contact an estate attorney. It is helpful for the Personal Representative to obtain guidance and make sure that they are administering the estate correctly and that they are not unnecessarily exposing themselves to personal liability for any debts or claims against the estate. It is also beneficial to the transaction to have an attorney involved in the estate because they are able to readily supply information and documentation pertaining to the estate that is needed in the real estate transaction. Real Estate attorneys can give general guidance to a Personal Representative as it pertains to the real estate transaction, but representation for the Estate is typically outside the scope of representation under a Real Estate contract and will require an Estate attorney to provide that legal advice.

  9. Is there a Will?
  10. When someone is selling property from an estate as the Personal Representative, it is important to know if there was a will. The Real Estate attorney is going to need to review the will and is going to be paying particular attention to the following information:

    Was the Personal Representative named in the will? If not, the attorney will want to see documentation in the estate as to why the Personal Representative was appointed and not the named individual.

    Does the Personal Representative have the authority to sell property from the estate? If the will does not specifically grant the Personal Representative authority to sell property, then the Personal Representative will have to get a court order from the Probate Court granting them the authority to do so.

    Did the decedent attach any life estate or other stipulation to the property that would prohibit the sale? If someone leaves behind property and grants a life estate to an individual under the will, that person has a real interest in the property that will have to be terminated by a deed transfer either at closing or before the contract is signed.

The above list is not exhaustive and depending on the Estate situation there may be other questions that a client selling property from an estate will be asked. Hutchens Law Firm evaluates each transaction individually and will work with the clients to ensure that all issues of the estate are addressed prior to closing.

Published by Kimberly Thompson on March 19, 2020