What is an Estate Sale?
The death of a relative is always hard on a family. Not only do you have to weather the emotional turmoil that accompanies someone you love passes away, but you also have to deal with the real-world details – like selling your relative’s home.
Selling a home after a relative dies is what’s known as an “estate sale.”
The term “estate sale” can often be interpreted in different ways. For instance, if you are not a Realtor, you might be thinking that an estate sale is an auction where furniture and other possessions are liquidated.
Most real estate agents, on the other hand, think of an estate sale as selling a property for one of the heirs. Both can be considered proper usage of the term. In some parts of the country, estate sales are called “tag sales” as well.
Selling the home of someone who passed away recently is similar in many ways to selling any other home, but there are some extra considerations. Knowing how to address all the potential hurdles of the estate sale will make the process easier.
Getting ready for an estate sale is no easy task. Your life is suddenly filled with tons of emotions. Now you have to sell a home which adds additional stress.
The most common situation is a son or daughter having to sell a parent’s home. Typically, there will be lots of great memories surrounding a parent’s house, especially when children have grown up in the place.
Lasting memories such as these can make selling that more difficult. Many are left to wonder what to do when inheriting a parent’s home.
Below you’ll find my best tips for selling a home after a relative dies.
Selling a Home After the Passing of a Relative
When figuring out how to sell an estate, there are some important considerations. Below you’ll find some things you should be immediately thinking about.
Transference of real estate after death
If a person dies without a will or testate (with a will) then the real estate passes directly to the heirs at law or directly to the beneficiaries under the will. For example, a single parent passes away leaving behind her two children. The house has been left equally to both siblings. The two children receive equal ownership of the house upon death.
The children don’t need the court or executor to transfer the property to them – the property passes directly; if there was no will the exact same thing occurs. So what happens when the home is going to be sold?
The first thing that needs to be done is to ensure the executor has been given authority to liquidate the real estate. There should be specific instructions in the will about selling the property.
First, look to see if the executor under the will was given power or authority over the real estate. If the Executor was not given authority over the real estate, then the beneficiaries hold the authority and can sell the real estate without the executor’s consent.
Every state varies on how a home is sold as an estate with and without a will. Following the precise procedures of your state is the first step in selling a house after a relative dies. I would highly recommend speaking with a qualified real estate attorney.
If you are going to be selling an estate where there are more debts than assets, this is what’s called being insolvent. If this is your situation it is important not to pay any debts you don’t have to—state law will set out a priority list for you to follow. If you pay some low-priority creditors, you could find you are personally liable for the amount you shouldn’t have paid out.
For example, don’t pay the landscaper or the telephone bill. These should be paid by the executor of the state once approved.
Pay the bills for the home
It is in your best interest to stay current with the bills related to the home – like the mortgage, utilities, and maintenance – until you finalize the home sale. While the passing of your loved one is important to you, the mortgage company and other service providers still expect to be paid.
If you are dealing with the death of an older parent, it’s possible they had a reverse mortgage. If so make sure you follow the necessary steps when selling in this circumstance.
You can avoid complications by making sure that all of these bills are paid until you are sure they don’t need to be – like if you let the landscaper know that their services are no longer required.
Paying the bills, however, should be done through the estate and not personally as mentioned above!
Collect all the necessary documents related to the home
One of the least enjoyable, but most necessary, things that those left behind need to do is collect all required financial documents. Financial documents are essential for the distribution of the estate, including the home. Without all the necessary documents things become much more complicated.
You may have to search for a while to find everything you need. Often all documents won’t be in the same place. Sometimes people will stash them in hidden places. It is worth the time to search everywhere, including crawl spaces, the attic, the garage, go through all the boxes and files, and even look under the mattress and drawers.
The documents you will want to gather may include:
- Will – If there is a will, it will significantly simplify the distribution of the estate.
- Receipts from bills – You will need to freeze your relative’s credit and contact all creditors, including the three major credit reporting agencies.
- Investment documents – Your relative may have had stocks and/or bonds.
- Insurance documents – There may be a policy from an employer, or one purchased privately.
- Homeowner’s policy – Keep homeowner’s insurance up to date and increase coverage if necessary.
- Bank account documentation – You want accurate information on all of your relative’s bank accounts.
- Personal documents – If your relative had any personal documents, like journals, poetry, etc., you might like to have it at a later date for sentimental reasons.
Once you have gathered all the documents you know, you will need, shred everything else that has personal information on it – like social security numbers.
It is common for identity thieves to use the social security numbers of the deceased. By eliminating all documents with the number on them, you make identity theft more difficult.
Change The Locks and Mail Delivery
When selling a house as an estate sale, it is essential you have complete control of the property. This includes changing the mail, so you receive it in a timely fashion, along with enhancing the home’s security. Keep in mind there are going to be folks who know about the death that took place and the fact the home may be vacant.
You will be surprised how many keys have been given out on a property over the years. Whether it is friends, relatives, the babysitter or various contractors who have done work. It is better to be safe than sorry.
Go Through Everything in the Home
Buyers are not going to be interested in the majority of your relative’s possessions, so ideally you will clear out the home altogether – and have it staged professionally for sale – or at least take out all the personal belongings and only leave behind enough furniture to aid in the sale.
You can read some additional tips on selling vacant vs. occupied to see which situation best fits your circumstances.
Clearing out an entire home of someone’s possessions, particularly if you have emotional ties to them, can be tiring and stressful. That is why it is helpful to have a process that makes things a little more straightforward.
The basics of organizing require the creation of categories – what you will do with each item as you process it. You want to keep some items, throw away other items, donate others, and maybe sell some things. See how to pack a house for moving. You’ll love the advice to make getting your home ready a breeze.
If there are things that family members are going to want, especially items that there may be some dispute over, go ahead and set them aside to deal with later. The sooner you get everything out of the home, the sooner you can put it on the market.
If your parents were in the fortunate position of owning a lot of valuable possessions it may be prudent to hold an estate sale of these things. Having an estate sale will allow you to maximize the value of your parent’s belongings.
Get the Home Ready to For Market
How to Prepare an Estate Home For SellingOnce you have processed all the personal possessions of your relative, you will be ready for the actual sale. At this point, you will go through much the same steps as any other home seller – although some minor differences may apply.
Often when selling a house that was owned by an older relative, or a house that has been occupied for decades, there is extra work involved in prepping for sale. This can be one of the most challenging parts of selling a deceased parent’s home.
The house may be quite dated, including old wallpaper, decorations, carpet, paint, etc. It may also have damage that has gone unaddressed for a long time.
You will want to bring in a reputable real estate agent to give you advice on what needs to be changed or repaired before you put the home on the market. If you want to get the best possible price, you will probably need to make some changes. They may include:
- Getting rid of old furniture
- Changing old window coverings
- Removing wallpaper
- Changing carpeting or other dated floorings
- Refinishing hardwood floors
- Applying a fresh coat of paint
- Eliminating all signs of pet ownership, like stains and other damage
- Installing new fixtures
- Updating lighting
In addition to any changes you make to the home, you are going to want to clean it thoroughly. There is nothing more critical to the sale of a home than a proper cleaning.
If you do not want to do the work yourself, ask your Real Estate agent for a reference for someone who will do a good job.
Once you have gotten the home prepared for buyers, then you can go ahead and list it through your Realtor. As long as you have made the home desirable based on the current market, you should be able to sell it for a fair price.
Hire a Top Producing Real Estate Agent
Speaking of real estate agents – make sure you hire an exceptional one! The first thing you need to know about real estate agents is they are a dime a dozen. I should know having been in the business for over thirty years. In my time I’ve had many outstanding agents. On the other hand, I have met plenty that I genuinely feel bad for their clients.
Picking the right real estate agent is critical to your success. From pricing the home correctly to having an exceptional marketing plan to staying in constant communication, your real estate agent needs to be on top of their game.
When selecting a real estate agent for an estate sale, you might want to look for an agent who has some experience with this type of transaction. As you have gathered from reading, there are a lot of things to consider when selling a home after the death of a relative.
One of the most critical factors in selling a home is picking the right real estate agent!
Did The Seller Die in The Home?
Whenever you are selling an estate sale, be prepared for the buyer to ask if the death took place in the house. For many buyers, death occurring on the property can be a problem. It gives them the creeps. In some states, you may have to disclose whether a death occurred in a home.
In other states disclosure of death is not required. Doing the right thing is essential, so make sure you ask your real estate agent if disclosure is a requirement. In most states, it is not a required disclosure.
Buyers can now find out if a death has taken place in a house on a new website called Died in House. The site will check the following:
- A death in a house and any relevant details.
- Names of those who died.
- The vitality status of associated people.
- Cause of death if available.
- Additional deceased information.
So if you are a buyer who has some concerns about a death in a specific property, the site could be a helpful tool. They do charge you 12 dollars to get the report.
Whenever selling property, it is important to understand the disclosure laws for your state. Laws can vary dramatically.
After Estate Sale Tax Consequences
When selling an estate one of the most important financial considerations will be dealing with taxes. For vital tax considerations and how they relate to your personal circumstances be sure to see the IRS guidelines on estate sales. Having a massive unexpected tax bill is never fun. In fact, it is the last thing you’ll want to deal with after the death of a parent.
Selling a home in an estate sale after the death of a loved one can be a trying experience. Homes often conjure up happy memories that can invoke our inner emotions. It is always hard to let go of a house that has become a home.
If you would like to sell your home then reach out to Sell for Cash AZ.