There are many positive reasons someone may put their home on the market, however, sometimes a property needs to be sold due to unfortunate circumstances, including a death in the family. Preparing a deceased estate for sale can be a daunting task particularly if you are in the midst of grieving. Here are some tips that might make this overwhelming process just that little bit easier.
#1 Dealing with the deceased’s possessions
The decision to sell or rent a property when a loved one passes away can be a tough one. Before you can even determine the course of action, there are legal hurdles to deal with along with a number of personal concerns. These can include dealing with emotions, grief and the expectations of family or other beneficiaries.
Most of us also accumulate a wealth of belongings over the course of our lives, and if you are responsible for the management of a deceased estate property, there will probably be a lifetime of memories involved as well. When you are grieving, having to assess and deal with another person’s belongings can be overwhelming. The process can be made even more difficult if you happen to live interstate or have limited time in which to manage the evaluation and the division of possessions.
Whether it’s a relative, friend or a business that deals with deceased estates, a helping hand can often allow you to put your emotions aside and focus on the task of preparing a deceased estate for sale.
#2 Obtaining probate from the courts
Before choosing an estate agent to manage a deceased estate property sale, you need to deal with the issue of probate as this process can take a few months to be granted (provided there are no objections). But what is probate? If someone dies and leaves a will, the nominated Executor of that will must apply to the court to get probate in order to manage the estate.
If the deceased did not leave a will, the procedure is more complicated as a family member needs to apply to the court for a Letters of Administration document, which can also take some time. If you are not quite up to going through this complex process earlier on, bear in mind that you have two years in which to sell a deceased estate property before you incur any capital gains tax.
If the estate involves property assets, one of the important roles of the Executor is the distribution of assets to those who are nominated in the will (the beneficiaries), and the sale of real estate assets is usually required before this process can occur. While waiting for probate, the Executor can start to organise the relevant property disclosure statements and get appraisals from real estate agents, however, nothing can legally happen until probate is granted.
#3 Determining the sale price
In terms of selling a deceased estate, once probate is granted, a real estate agent (or agents) needs to be appointed and the sale price determined. Agents essentially act as a go-between you and potential buyers, and they assist with negotiations in order to reach an agreed sale price for the property.
Agents can help to establish what the current state of the market is, and help with nominating a realistic expectation in terms of the sale price. It’s important that the Executor of the will also speak with any beneficiaries about their expectations.
During this period, you will be required to sign a legally binding contract with your chosen agent which will detail items including sale price, advertising costs and commissions to be paid. Independent legal advice is recommended if you are unsure about any contractual obligations you are entering into.
#4 Agreeing on the method of sale
There are a variety of ways a property can be sold from fixed date and private sales to auctions. Each method has its own unique set of circumstances, so it’s best to discuss these with your real estate agent to determine what suits your situation.
If there are multiple beneficiaries, a quick sale may be required and agents might suggest selling by auction. Auctions are often preferred when it comes to deceased estate house sales as they provide both the Executor and the beneficiaries with greater certainty. They also allow the Executor to dictate the terms under which the property is offered.
Auction campaigns are also typically limited to only four or five weeks, which will allow the market to determine a fair price for the property. With deceased estates, it’s usually unlikely that offers will be accepted prior to auction. This means that the Executor is often willing to set a price expectation in accordance with market rates as well as the deceased’s wishes if applicable.
#5 Marketing the property
When selling a deceased estate, once the sale price has been agreed upon, the real estate agent will normally begin a marketing campaign to attract potential buyers and will provide them with an opportunity to view the property.
A few things need to be determined at this stage. Where, how and for what amount of time will the property be advertised? What photos will be used to sell the property and does a floor plan need to be created? On what platforms (for example in print or online) will the property be advertised in order to attract potential buyers?
When it comes to marketing a property, presentation, of course, is key. In terms of a deceased estate property sale, it’s often worth preserving some of the character and integrity of the home when presenting it. Clutter should be removed of course, but leaving bigger furniture items in the home will show buyers that it has actually been lived in for many years. Whether it’s a ‘renovator’s delight’ or has been meticulously maintained, many buyers get excited about the prospect of giving deceased estate homes a new life.
#6 Providing a vendor’s statement
The final step in the process of selling a deceased estate is providing the interested buyer with a Section 32 statement. This is a document that discloses information about a property to a prospective buyer in order for them to sign a contract to purchase, and is usually prepared by a nominated lawyer or conveyancer.
Need some assistance with preparing a deceased estate for sale? Contact the experts at Property Clearance today on 1300 200 292.