The Top 3 Mistakes Made When Selling Real Estate Subject to Probate

The Top 3 Mistakes Made When Selling Real Estate Subject to Probate

Jun 13, 2021 | Estate Planning, Probate, Real Estate Law

A Home Sale In Probate

The Michigan probate process involves the administration of a deceased person’s will or the estate of a deceased person without a will. The legal process can be a difficult and stressful process for people who are experiencing the grief of losing a loved oneState probate regulations set forth specific procedures for the distribution of assets to help people with the process of listing real estate during probate action.
 
In Michigan, the most important first step in a probate sale is to contact an experienced probate attorney who you trust. This attorney will follow the legal and procedural requirements. They will gather the needed documents, draft and file the probate forms, and speak to the presiding judge. They will also help collect any money from insurance, solve tax issues, and serve as a general advisor. Opening an estate without the assistance of a probate attorney may risk personal liability if there is a failure to follow the informal probate process or formal process.
Transfer of Property
Often the most problematic and stressful part of probate court has to do with the transfer of property. This is because the protection of heirs-at-law, and the estate assets are paramount under the lawThe transfer of property includes both personal property as well as most people’s largest asset: the home. The probate sale of a home or other real estate is much more involved than a traditional sale. Regarding real estate sales in probate, here are three of the top mistakes people make.
1. Not Starting the Probate Process Early Enough

Michigan probate law requires a personal representative to publish a death notice in the local newspaper and notify creditors and heirs of the death. This process sets the clock for people who believe they have a claim against the estate. Since real estate is an asset of the estate, it is subject to creditor claims. The publication process can take several weeks, and even more if a probate court requires it. An estate representative needs to open the estate as soon as possible so that they market the property. This is especially true when the financial situation of the decedent was not good. If the home mortgage was in default at the time of the decedent’s death, the heirs of the estate could stand to lose the equity in the real estate if the estate is not open promptly to allow the property saleEven when a home is not in distress, the estate executor cannot list a house for sale in probate until they have received the letters of administration from the probate court.

2. Selling Property Without Court Authority

The personal representative or estate executor cannot sell a home that is subject to probate without the court’s authorityIn Michigan, the probate court will either grant an estate representative the right to sell property during the probate proceeding or they won’t.  Without the court’s authority, the property cannot transfer. Therefore, it is imperative that before real estate is listed for sale, the personal representative seek probate administrationThe court will want to see that an appraisal price is an acceptable price or reasonable market value for the heirs of the estate.

 
Once your probate attorney obtains the court’s permission to sell the home, the personal representative can list it, establish a sales price, and solicit real estate buyers. While it is possible to do this without a real estate agent, using an experienced agent will simplify and speed up the processThis is because they are familiar with the market and should already know the rules and regulations involved with local probate estate sales. While the probate attorney handles the legalities of the estate in court, it is the sales-commissioned real estate agent who handles the actual sale of the real estate, making sure it is properly valued and listed.
3. Over-Disclosing When It Is Not Necessary
Your probate attorney will help to disclose all assets of the estate and the persons who may have interest in the personal property and real estate. However, a personal representative of an estate is exempt from disclosing the condition of real estate or naming any home defects under the Michigan Seller’s Disclosure Act (the “Act”) Once a personal representative takes it upon themselves to disclose the condition of a property by completing the home seller disclosure form in detail, they become subject to the Act. They can be held legally accountable for misrepresenting a home’s condition. So it is very important that a personal representative notifies a potential buyer that they are exempt from completing the form under law If a personal representative is uncertain if they should disclose a home defect or not, they should consult with a real estate attorney.
Conclusion
Throughout the sales process, the probate attorneys at Soble Law will coordinate with the real estate agent as well as third-party professionalsSince the representative for the estate is accountable to the court and the heirs for all proceeds from the sale, it is vital to have a probate attorney involved.
 
Soble PLC provides that their clients are protected throughout the probate and property sales process. Contact us today at 888.789.1715 if you have any further questions or concerns.

 

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