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Why People Sell Series: Death of a Loved One
We are very sorry for your loss and have walked in your shoes with many losses in our families too. It’s not easy.
We all know logically that we are all born to die and even if we believe our loved one has gone to a better place, it is still so hard to say goodbye.
When real estate is involved, it requires a business transaction during a time of grief, which makes it even harder. You will need the help of an experienced Realtor in Estate Sales and an experienced attorney as well. We are happy to refer you to a good attorney.
Steps To Take When Listing Your Home After a Loved One's Passing
Step one in an estate sale is to determine if there is a Will to guide the selling process. Hopefully the answer is yes. Everyone needs a Will to avoid long probate and reduce risk of loss to your surviving loved ones.
Step two is to find the Will. It may be in a safety deposit box at the bank or it may be stored at the Wake County Estate Division. Wills are not recorded documents and they are not on public record so many families struggle to find the Will as they search file cabinets and boxes.
- Quick tip on Will storage: Residents of Wake County may take advantage of free storage offered in the Estate Division at the new court house. Yes, free and confidential filing of Wills.
Step three has several parts. That's why a real estate agent usually becomes involved at this stage to help find the best solutions.
First, here are a few of the common questions that need answers. We understand that it can be difficult to act as the Executor and Heir during your time of deep grief but it's important that these questions are answered:
- Is there a surviving spouse and can they afford the house alone? If so, for how long?
- Was there no surviving spouse and the house is now vacant? If so, is it still costing money to maintain? You should know: The cost is maintained by the Heirs, not the Estate.
- The expenses and maintenance will continue for the Heirs therefore. Thus, how long before the property realistically will sell?
- Can the Heirs afford to maintain the cost of the house until it sells?
- In order to net the highest return from the sale, will the Heirs need to invest more of their money into the preparation of the house for sale or sell “as is”?
- Is there equity remaining in the home or has the equity already been used from refinance, reverse mortgage or lack of time in ownership to build equity?
If you are a surviving spouse, be thankful for owning your home in North Carolina. It is a little easier here because even if there is no will, we are a marital interest state. This means the surviving spouse will automatically (and tax free) inherit all NC real estate unless there was a prenuptial agreement in place. It is wonderful to be free of worry about having a roof over your head but, it may not be a roof you can afford for long on one income. Thus, hard decisions may still be on your shoulders.
Surviving Spouse needing to sell
Moving away from memories or the burden of caring for the house on one income can cause many people after a death to sell and buy a different home. Once the decision to sell is made, it can be a very exciting time in your life. Having friends and family members help you in preparation for your move can actually be healing. It's another grieving step so that when you get to the new home, you often feel a sense of closure and acceptance with your new norm. However, if the need to move does not have you excite or if you're feeling so overwhelmed that putting one foot in front of another is a challenge, then don't stress or beat yourself up. It's ok. Everyone goes through grief in their own way and in their own time. It's ok to go slow as long as you're moving forward and have the financial resources to carry the cost of the home while you mentally and emotionally prepare for another change.
When you can’t afford the home alone
Unfortunately, many surviving spouses can’t afford to keep their home on one income and therefore have a need to move faster than they may emotionally be prepared for. I have seen this situation many times and have watched people frozen in grief, hanging on to the memories too long and using savings they need for their future to carry the expenses of a house. As hard as it is for you, if taking care of the house is an emotional or financial burden, it will only get worse if you don't take steps to move forward now. We are very experienced in holding hands and walking people through each step. Steps such as preparing the home for sale (including help with de-cluttering or necessary repairs) and steps to find a new affordable and burden free home. Please don’t wait too long. Contact us today for a consultation. I have watched many surviving spouses make the mistake of waiting too long to move. Let’s weigh the cost together.
What to do when the mortgage payoff is higher than the home value
If there is a mortgage on the property, then step one after death is to contact the mortgage company to find out what the exact mortgage pay off amount. Then contact a Realtor or hire a fee paid appraiser to value the home. If the current market value is lower than the amount owed on the property, many surviving spouses or heirs will choose to rent the property until the value rises. Others choose to give the property back to the bank. Before making any decision quickly, you should consult an accountant, attorney, the mortgage company and by all means, a real estate agent. As a real estate professional who is certified in short sales, we have helped many Heirs complete a short sale with the bank and they have actually been paid thousands of dollars at closing. Banks do not want to own real estate and therefore, many pay incentives for short sales. You may have money in the house even if the mortgage balance and appraisal appear to be a negative number. Research all of you options with professionals.
Selling a Vacant Estate Home
Many times estate homes are sold vacant. This requires many decisions to be made as well. If there is a mortgage on the property, the mortgage must be continued to be paid or the bank may foreclose. Additionally, taxes, insurance, utilities and lawn maintenance may also be a burden of both time and expense for the heirs. Therefore, time is not generally anyone’s friend with a vacant house. The quicker it can be listed for sale, sold and closed, the faster the expense will stop. However, you don’t want to give the investment away. Preparing the house for sale properly (such as removal of anything that does not help the home show its best, keeping utilities on for home showings and inspections) sends a better message to the home buyer that generally results in higher profits. All of this and more will be discussed in our seller consultation to help you make the best decisions possible.
When there are Multiple Heirs decision are more complicated
Over the years we have helped many families sell property in order to settle an estate. Sometimes it only involves one heir but usually it involves several heirs in different locations around the country. We have found the easiest way to communicate through busy schedules and time zones is by group email and conference calls. At Linda Craft & Team, Realtors we provide a free conference line for our clients to use and we create an email distribution list so all parties are notified at the same time with all activities and progress. There are many decisions to make such as repairs before selling, updates to net more money from the sale and then the actual listing and marketing of the property. When all parties are kept in the loop about showing activity, feedback from showings, advertising, market updates and decisions, it reduces stress. We have found that by providing timely and accurate communication reduces stress and expedites time frames resulting in higher net profits for our estate clients.
Here is some additional information about North Carolina Estate Sales that may help you with the estate sale process in the future:
- The executor or executrix is not the seller. They do not own the property. Instead, they are simply facilitating the sale. Seller name on the listing contract and purchase contract should not be the executor name. This is a common mistake. In 2014, the state of North Carolina adopted new real estate listing and sales contracts allowing entity signatures for estates and corporations. The executor would sign as executor for the estate of the deceased name on record.
- Where there are multiple heirs, many will choose to have a licensed appraiser value the property in addition to a Realtor. We are happy to provide you a list of experienced local appraisers if this is something you wish to do.
- Listing a property for sale will require a copy of the death certificate and estate paperwork. In North Carolina, it may take 2 weeks to a month to receive the death certificate from the county. So plan for this carrying expense in your budget as well.
North Carolina Seller Disclosure Statements are exempt during estate sales. This form is required by state on all re-sale real estate transaction but is not required for estate sales
In North Carolina, attorneys rather than title companies conduct real estate closings. The closing attorney will require a copy of the death certificate, estate paperwork, names, addresses, phone and emails for each heirs. In addition, they will make certain all affidavits are filed and the estate is in order to transfer title.
North Carolina is a marital interest state. Therefore, if any of the heirs is married, both parties must sign all paperwork. Including but, not limited to; the listing contract, sales contract, HUD One Settlement Statement and deed. Closing documents must have all signatures notarized.
Please note: Linda Craft & Team, Realtors is not an attorney or CPA and can’t practice law or accounting. This information is general in nature and the author, Linda Craft, highly recommends that a professional in the area of law and accounting be consulted.
How Can We Guide You Through This Difficult Time?
We're here to support you as you balance grief with the need to sell your Wake County home. Contact us today for expert assistance that will help make the estate sale process as easy as possible for you and your family.