Probate sales can be attractive to buyers, especially when the housing market is hot. They often have lower prices and long, uninterrupted ownership histories. They can also give you a foothold in highly desirable neighborhoods or communities. However, buying a house in probate isn’t as easy as buying directly from a living seller. Before you put in your offer, you should be prepared to go through the probate sale process.
What Buyers Should Know about Buying a House in Probate
When a person dies owning property, it must be sold at the best possible price to maximize the value to the person’s heirs and beneficiaries. To make sure this happens, the sales are controlled by the probate court. When a house is sold in probate, a judge may be the one to:
- Select the realtor
- Order a home appraisal
- Set the listing price
- Confirm any offers received from buyers
At a minimum, however, and unless a Will confers specific power to sell real property, closing on the sale of a home in probate can only occur after an order authorizing the sale. As such, buying a house in probate can be risky and slow compared to purchasing from a living seller. Among other things, beneficiaries of the deceased must be notified of the sale and given a chance to object. In addition, it is often difficult to learn about invisible problems with the home, since the most recent resident is deceased and unable to provide mandatory disclosures. You should always have a home inspection done before putting in an offer on a probate sale home.
Selling a House in Probate
If you are the personal representative of an estate, selling a house in probate is often part of the job. When many Florida residents pass away, their main asset is their home. Personal representatives (also called executors) may need to sell the property in order to pay the deceased’s final medical, funeral, and burial expenses, or divide up the estate between the person’s beneficiaries or heirs at law. How this happens depends on whether the person had a Will (and what it says), or died “intestate” (without a Will).
Selling Property With a Will
If a valid Will has been submitted and accepted by the Florida probate court, the court will appoint a personal representative to administer the estate. That person will be given authority to sell real property (including homes, land, vacation properties, timeshares, etc) located in the state. If the Will directs that property be transferred to a specific person (or people), the personal representative must do that. However, if it does not, the personal representative may petition to sell the property. In that case, the probate court will likely retain authority to approve the offer before sale, to ensure that it is sold at a fair price.
In some cases, non-Florida residents will die owning property within the state. Before selling that property, the out-of-state relatives or personal representatives will need to open an ancillary administration probate proceeding to oversee the sale of the Florida property.
Intestate Estate Sales
Where there is no valid Will, the process can slow even further. This is because the probate court will need to identify the deceased person’s natural heirs. They must be given notice of the probate proceeding, as well as the sale of the home. They may also have the ability to contest the sale price or the acceptance of any offer by the personal representative.
Transferring Property Without Probate
Not every property transfer has to go through probate. One of estate planning attorneys’ goals is to avoid probate court as much as possible when handling your affairs. In many cases, some proactive work while the property owner is alive can minimize or even eliminate the probate court’s role in the process.
The easiest way to avoid selling a house in probate is to allow that property to transfer to a spouse or next of kin through joint ownership. When spouses buy houses together, they take the title as “tenants by the entirety.” Other co-owners can hold property as “joint tenants with rights of survivorship.” In both cases, when one owner dies, full ownership rights transfer automatically to the surviving owner (or owners). For spouses, there is no paperwork required to assume full ownership. Joint tenants will need to record a death certificate, but they will not need to go to the probate court. The remaining owners will then have unrestricted authority to sell the home, should they decide to do so, without the probate court’s approval.
When you create a revocable living trust, you set up a separate legal entity that will outlive you and manage your assets after you die. If you transfer the deed for real property into the name of the trust prior to your death, the trustee will have the authority to sell the home and distribute the proceeds to your trust beneficiaries. The probate court doesn’t need to get involved. However, if you fail to fund your trust, the probate court may need to oversee the execution of a pour-over Will, transferring your property into your trust after your death, before the property can be sold.
Sale of Personal Property
If the property you are buying or selling is not land, you may be able to avoid a probate sale. Generally, the sale of personal property (vehicles, furniture, jewelry, personal effects) is up to the personal representative unless a piece of property is specifically devised to a named beneficiary in a valid Will.
Get Help with Your Probate Sale of Real Property
If you are trying to buy a home in probate or administer a probate sale as a personal representative, you may need the help of an experienced estate administration attorney to help you price, list, inspect, and sell the property. At Harrison Estate Law, P.A., our estate and probate team can help consider your options and meet all the probate court’s requirements prior to sale. Contact us here or call 352-559-9828 to get help today.