When you’ve had a great experience buying or selling your own home—thanks to a talented real estate agent—it makes sense to seek out this trusted Realtor® again and again. However, if the home you’re looking to sell is a probate property, this might just be a mistake.
According to the American Bar Association, “Probate is the court-supervised legal procedure that determines the validity of your will. All property, debts, and claims of the estate are inventoried and appraised. All valid claims of the estate are collected, and the remainder is distributed to beneficiaries according to the will.”
Unless your dearly departed loved one made arrangements to avoid probate (such as a living trust) prior to passing away, most of the estate assets will need to go through the probate process. This includes the family home and all other real estate owned by the decedent.
Often the decedent’s home is sold during the probate process to cover debt claims against the estate. It may also be sold so that the proceeds can be used to equally distribute the cash value of the estate amongst multiple beneficiaries.
If you’re facing this situation, you need the help of an experienced probate real estate agent who understands how selling property during probate proceedings differs from a traditional home sale.
Traditional Home Sales vs. Probate Sales
When you’re selling your own home through a traditional sale, you’re acting in your own interests, which means you can set your own timeline for the home sale. You’re free to list the property at any time and at any price.
With traditional sales, it’ll take an average of three weeks to get an offer for the home—and you are free to choose whether or not to accept the offer. Once accepted, you’ll have an average 47-day escrow period and once all the final contracts are signed the home is sold without any need for court supervision.
When you’re the executor or personal representative selling a home during probate, you’re acting in the interest of the decedent’s estate. This means you’ll need to follow state probate laws and any potential directives from the probate court judge when setting the price and, in some cases, the timeline.
Due to these regulations, probate property sales can be both subtly and significantly different from a traditional home sale. Just how different depends on whether the probate court granted you rights of independent administration or dependent administration.
If you as the executor has been granted independent administration rights, the probate property sale proceeds much in the same way as a traditional property sale. You have the freedom to set the list price, list the property on your timeline and accept an offer without interference from the probate court.
However, there are probate-specific details that your agent needs to stay on top of, such as using the proper probate contracts, listing the home as a probate property, and making disclosures specific to probate.
If these details aren’t in order at your final probate hearing, the probate court judge likely won’t allow the estate to be closed. You’ll need to redo the paperwork and schedule a new hearing, causing the lengthy probate process—which already takes an average of six to nine months—to drag on even longer.
For personal representatives who’ve been granted dependent administration rights, the probate property sale is already lengthier and more complex. In these cases, the probate court oversees the home sale through an additional hearing called the court confirmation hearing.
Before this hearing, the executor hires a probate agent to list the house at a price that cannot be less than 90% of its fair market value. Once you receive and accept an offer, it must then be presented to the probate court for confirmation. In some states, you might even have to remarket the property for 30 to 45 days at that accepted offer price before presenting the offer to the court.
In many states, the probate judge does not automatically confirm the accepted offer at this hearing. Instead, the court may entertain higher offers from other buyers attending the hearing. Known as the overbid process in California, this procedure functions much like an auction with the court accepting the best offer price before confirming the sale.
Fortunately, many states have taken steps to streamline the probate process and to avoid complicated steps like the court confirmation hearing.
So far, sixteen states have adopted the American Bar Association-approved Uniform Probate Code to simplify probate proceedings. Other states have streamlined the probate process on their own, such as in California where they’ve enacted the Independent Administration of Estates Act (IAEA).
Thanks to this, probate property sales requiring court confirmation are on the decline across the country.
Sacramento-based probate attorney John Palley, who has been awarded Martindale-Hubbell’s prestigious “AV” peer review rating, says, “I would say that 5% or less in CA go to Court. The rest of the country does have streamlined probate but they would still go to Court if someone in family objects to the sale.”
The complexities that arise from changing and varying state regulations make hiring a probate-experienced real estate agent a must.
Do I Need a Certified Probate Specialist?
Since probate experience is such an important qualification for your real estate agent, finding one that’s officially certified might be the smart play.
Known as Certified Probate Real Estate Specialists (CPRES), real estate agents with this designation have been trained by the U.S. Probate Services. In order to receive this certification, an agent must pass a test that measures their ability to handle complex probate property sales procedures.
Of course, not all experienced probate real estate agents have CPRES certification, which is totally fine. Non-certified agents may have instead received their probate training through past experience of handling probate property sales or by attending seminars or through studying state government training materials, such as those produced by the Arizona probate courts.
Just be sure to ask about what type of probate training or education your chosen agent has had. HomeLight offers a free service that uses machine learning and historical data to objectively match you with top performing agents that have probate experience.
Which Came First, the Agent or the Lawyer?
When you know how lengthy the probate process can be, your first instinct might be to get the home listed as quickly as possible.
Not so fast.
Even if you are named as the executor of the estate in the decedent’s will, you have no legal authority to transact any estate business until you have been officially appointed as the estate’s personal representative at your first probate hearing.
This means that you cannot list the house or even sign a listing agreement with your probate agent until you have authorization from the probate court. To get this authorization, you need to have a probate attorney file a petition to probate with the probate court and then wait until you’re granted rights at that first hearing.
So the first professional you need to contact in order to help you navigate the probate process is an experienced attorney. However, hiring a probate attorney doesn’t mean you should forego hiring an experienced probate real estate agent. While waiting for the court authorization, an agent can help prep the home for sale by assessing the property’s condition, running comparables in your area, determining the home’s value, connecting with cleaning services, contractors, and other vendors.
While probate attorneys charge by the hour, probate agents receive the same commission that a traditional real estate agent would be paid.
If you opt for hiring an agent inexperienced in probate, you’ll have to ask your attorney to review the home sale documents to ensure they meet probate regulations—which will cost you more in attorney fees.
It’s only natural to want the comfort of the family agent’s familiar face to help you through the difficult duty of selling your childhood home. However, if your regular Realtor® has never sold probate property, your probate proceedings will go more smoothly if you enlist the help of a qualified probate agent.