Rain City Guide

Estate Sales and things you need to know while selling or buying them…

Reba Haas on 11 18, 2007

I’ve worked with many estate sales over the years and, like most real estate transactions, they have their own issues to be aware of – and there are many times very individual circumstances to navigate. Just a couple of months ago I helped a client buy their very first home in a north Seattle neighborhood and we dealt with a situation where an attorney had been given court approval to sell a property on behalf of a disabled adult child whose mother had passed away this year.

[photopress:john_doe.jpg,thumb,alignright] There are several ways in that a home may be sold after an owner dies.  Sometimes an executor of the estate is called out in the will and they may legally sell the home.  In this case the “seller”, who is the executor, is exempt from having to fill out the Form 17 or Seller’s Disclosure Form that all other sellers are required to complete per Washington law.

In some estates though an executor is not chosen by the decedent and the matter of the home sale falls to an attorney or some other personal representative.  These individuals end up having all of their decisions regarding the sale overseen by the courts which requires some additional work throughout the transaction.

Guardians are in the not so fabulous position of having the courts also following their every move and are required to get approval for their actions.  Unfortunately for them too is that they are now still required to fill out a Form 17 even if they’ve never lived in the home or have any actual knowledge of the house and its condition.  Now, if the seller (attorney, guardian, executor or otherwise) KNOWS of any material defects they are still obliged, by law, to disclose the problem regardless of the exemption of the Seller’s Disclosure Statement.

But, back to the situation I had just begun to describe.  The attorney working on this sale was required to list the details of the sale in a public notice for 2 weeks and at the beginning of everything we had been told that this had been done.  Well, sure enough, when we got to the closing date (a couple of days from but close enough my clients had signed documents) the attorney ended up in front of a judge who said she hadn’t met the full period (she was off by a day or so) and he required that she post the sale info for another full week.

Needless to say she was freaked out, and she pleaded with the judge to allow us to move forward, but he was having nothing of it.  So, my clients got stuck waiting another week – which actually meant they waited longer because since they thought we had things tidied up originally they’d made some other plans for later that month and now they wouldn’t be able to get out of their rental fast enough.  So, in the end they kept the rental a month while they had work done at the new house and they just moved in about a week ago.  We did get a small credit from the listing agent for my client’s distress but it wasn’t much.  However, in the scheme of things we knew up front that we were offering a quick sale (3 weeks) and that it could get bumped – we just couldn’t anticipate a family medical issue when we started the contract that would alter my client’s needs in terms of time spent with loved ones.

In the case of an estate requiring the terms of the sale to become public notice we knew that there was a chance another buyer could come in and outbid my clients.  The requirements, as we were told by the attorney, are that the competing offer must be 10% over the initial offer and that 20% of the sales price must be held in escrow.  Most people nowadays cannot afford to do this because of our housing prices so the likelihood of it happening was slim. However, it did still cause my clients to be a little nervous throughout the contract period.

An item I recommended, and that we did get for the client, was for the buyer to get a Home Warranty since we weren’t going to get any disclosure details and since the home was older. It doesn’t cover everything, but it covers enough and if the credit we negotiated as part of the sale could cover the cost of it, then why not?

Other items to be aware of are what kind of deed you’ll be receiving (or giving if you work for the estate).  In another current client sale it is very likely that a Personal Representative Deed will be conveyed rather than the more typical Statutory Warranty Deed.

If you find yourself on the buyer’s side of an estate sale be sure to sort out who has authority to sell and what the requirements are of that individual. You don’t want to find yourself faced with any nasty surprises.

About the Author: Rebecca Haas

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Rebecca (aka Reba) has helped direct Team Reba to its current level as a top producer in the region working with a successful hybrid of investor/commercial and residential clients in the Puget Sound and Greater Seattle areas. Check out our company website, or our company blog to see what else we have to say about local real estate. Or, call us at 425-970-3697 for a more personal touch.