On KNZR every Saturday at 11 a.m. and every Sunday at 8 a.m., Laurie McCarty hosts the “Kern County Real Estate Review.” Today’s topic: Probate Sales. Read below to learn more about Probate and what a person should do with the house before listing it for sale.
What is probate?
Probate is the method that a person uses to distribute or sell property owned by a deceased person. Sometimes, the person died recently. I have some cases where Mom or Dad died in January of this year. In other cases, the family has continued to live in the real estate for decades after Mom or Dad passed, and they just never took the next step. I have seen some houses that continue to be owned by dead people today, and their owners died as far back as 1993! (That’s 29 years!!!)
Why would a person want to open a probate case?
There are three big reasons that people open a Probate on real estate.
- They want to receive their inheritance. Probate is the method by which heirs inherit the property.
- They want to sell the property. Before Probate, heirs cannot sell the house with a clear title.
- They want to borrow money from a bank. Before Probate, no bank will lend against the house.
Why should the probate case start soon after a person’s death?
There are advantages to opening probate close to the date of death. The faster that a person opens Probate, the greater the chance that the process is worth the cost. As time passes, important documents are lost. For example, one important document that is frequently lost with time is the deceased person’s last will and testament. If the Will is lost, California law divides the property among the living heirs. The number of people who inherit the property gets larger and larger with time. When enough time passes, the property that was previously divided between three people might be divided between ten people, fifteen people, or more!
Who should a person contact first: The Lawyer or the Realtor?
A person can start with either person first, they will need both to sell a probated property in California.
One perspective says you should start with the Lawyer. There are lots of papers that need to be filed before the estate can legally sell the house. However, most people feel more comfortable talking to a Realtor first.
Other people say you should start with the Realtor. Realtors can offer free information. Because Realtors earn a commission, they can share what they know without billing for the time invested. Lawyers often will charge a consultation fee of $400 or more.
A Realtor is unable to give legal advice—they cannot tell a person what the person should do. However, a Realtor who is experienced in Probate can share a lot of information about Probate. With the information provided, an heir at least knows their available options.
If you start with the Realtor first, tell the Lawyer which real estate agent you have selected. They can work together through the rest of the process.
Why is the Realtor just waiting around? (i.e. What is taking so long?)
The Realtor should not list the home before the heir has a court order. In Probate, the court order is called the “Letters,” which is short for either “Letters Testamentary” or “Letters of Administration.”
These two documents serve the same purpose and have only slightly different meanings. A person who holds “Letters Testamentary” was named as the executor in a will. A person who holds “Letters of Administration” was selected by California law rather than by a last will and testament. Other than this distinction, the Letters have the same effect. They identify the person who has the legal right to sell the real estate.
Without Letters, no person has the legal authority to sell the house. Depending upon the court’s backlog of cases, a person can wait three to six months to get Letters. For the house’s safety, the availability (and vacant status) of the house should be kept a secret. That is why a person should never list the house for sale until they hold Letters in their hand.
How to protect the Real Estate while waiting for Letters
Vacant real estate attracts squatters and vandals. Probated real estate is often empty and an attractive target. Several methods effectively protect the house and save the heirs money, time, and headache:
Keep it secret.
Spend time at the home. Hire a gardener. Check the mail. And never let anyone know that the house is unoccupied. By keeping the house’s status secret, a person avoids spreading the news to those who would break into the house and cause damage. If you can, don’t even tell the neighbors.
Install a security alarm.
At the time of this article, Western Security installs alarms in Bakersfield for $400 to $600, and the monthly service charge for monitoring is $35—that equates to $420 per year for peace of mind, and it is worth it!
If you already have had break-ins, the security alarm will not stop the break-ins immediately. The homeless community talks, and word spreads once vandals have identified the new squat location. Just like it took a little time for word-of-mouth to spread the news of the newly available house, it takes time for word to spread that the home is now protected. Therefore, if you have already had break-ins at the property, expect two or three incidents where you must respond to the alarm before things quiet down. The homeless community needs time to learn that the alarm is real and spread the word that the house is not worth the hassle.
Do not post signs!
This rule is similar to “Keep It Secret.” When I list a probate property, I never put up a sign. The sign attracts attention and causes people to ask: Is the house vacant? Because a Probate sale can take longer than the average sale, the yard sign is a welcome mat for trouble.
Rent the house as a last resort
I don’t recommend renting a house that will be listed for sale. Especially in the current market, where rentals are hard to come by, tenants are choosing eviction over peaceful termination. Tenants also cause problems with showing the house, fill the house with clutter, and sometimes cause damage during their occupancy. To avoid headaches, don’t rent the house during the probate process.
However, if the heirs cannot keep the house safe with other methods, having a tenant is a great way to avoid squatters, vandals, and other problems that come from the house being vacant. Again, I cannot stress this enough, renting the house to tenants is a last resort and should never be the first option.
If you have real estate that dead people own, call Jared R. Clemence at Coleman & Horowitt’s Bakersfield office: 661-325-1300. I have a team of excellent Realtors and Mortgage Lenders who can assist in selling or refinancing your probated property.
Probate is the focus of my legal practice, which means that I can help make the process smoother than attorneys who only handle one or two Probate cases each year.
Also, make sure you tune in to local Realtor Laurie McCarty’s “Kern County Real Estate Review” every Sunday at 8 am on KNZR, which airs over radio waves: 1560 AM and 97.7 FM.