All About Estate Sales

Typically, when a home listed for sale, the seller is the homeowner. But if the homeowner is deceased, the seller is the estate, and is represented by the person in charge of administering the estate (the estate trustee).

The basics of buying a home that’s part of an estate sale are generally similar to buying any other re-sale home. But, there are a couple of considerations that your client should be aware of.

First, the closing date might be a moving target. Since the home’s title is in the name of the deceased homeowner, the trustee may need to get permission from the courts to sell the home on behalf of the estate. This process is called probate. Sometimes this will already have been done before the property is listed.

As the home may be listed for sale before probate is granted, the seller may ask for a closing date that is several months away or may have a clause that allows the closing date to be delayed if probate isn’t granted in time.

As a buyer, your client needs to be aware of their own timelines and needs. Have they already sold their existing home or given notice to their landlord? If so, do they have a back-up plan if the closing date gets postponed? How much flexibility do they have?

One potential solution is to add a clause to the offer that states if probate hasn’t been received in time for the sale to close on the selected date, your buyer will be able to take occupancy of the home until the sale can close. Essentially, this means your buyer will be renting the home from the seller at a particular price, until probate is granted and the sale is able to close. While this may not be appropriate in all circumstances, it’s something your client can discuss with their lawyer if they are considering it.

The second consideration your client should be aware of is that less information may be available about the state of the home than with a typical re-sale home. Since the homeowner is no longer around to offer insights about the age or condition of the home’s systems, such as the furnace, roof or plumbing, or the home’s history in terms of renovations, damage, fires, etc., a home inspection is a smart move.

Your client can seek out a qualified home inspector to help them assess the condition of the home and its systems and identify potential problems.

Reference: Reco's Ask Joe Column