If you’re preparing to sell a house in probate in NY, there are plenty of myths floating around about probate laws. Before you take any further steps, you’ll want to get your facts straight and make sure you have the authority to sell a house in probate and anything else that would be helpful to know beforehand. Probate can be a lengthy process and a confusing one at that, but busting probate myths will help you understand what to expect. Below we’ll take a look at some common probate myths to help clear any confusion when it comes to selling a house in probate in New York.
Selling a House in Probate in New York
If you’re looking to sell a house in probate in New York, you’ll definitely want to make sure you can legally do that. When you go through the probate process, the court usually determines if the property needs to be sold to pay off debts, but if there aren’t any creditors to satisfy, you should be able to sell relatively quickly. But no matter what, while going through probate, you’ll need to get court approval before you can officially sell the property.
However, you will also need to get on the same page with your siblings or other family members on how you intend to sell the property. If the house has been sitting vacant for a while, you’ll more than likely need to address some repairs, overdue maintenance before listing, and maybe code violations. Or, if the property you’re selling is considered ugly, you’ll want to make some updates. Furthermore, you’ll need to coordinate with everyone to go through belongings to clear out the space or consider having an estate sale if no one plans to keep anything. Staging a home is a crucial part of the home selling process. However, you could consider selling as-is instead of fixing up and staging if you’d prefer to save money on repairs.
You’ll also want to decide if you’d like to hire a listing agent or try selling by yourself. Some people like hiring a real estate agent, others have a hard time finding an agent, so they choose to sell a house without a realtor instead. If you plan to do that too, just remember there are plenty of real estate terms you should know when selling a home by owner in New York.
Selling a house, in general, can be stressful and time-consuming, add the fact that you’re selling a home in probate in NY, it probably won’t be as straightforward as you would think. But before you get discouraged, it is possible to do, you just have to your facts straight and avoid being misled by some of these common myths about probate home sales.
Myths About Probate Home Sale
When you go to sell a house in probate, don’t be confused with these common probate myths. It’s important to get your facts straight when selling such a large asset, such as an inherited house. Below we’ll bust some of the common probate myths so you’ll be prepared to sell your inherited property while in probate.
Probate Myth #1 – You Won’t Need an Experienced Team to Help You Sell Your Probate House
This probate myth is false, you do need an experienced team to help you. While going through New York probate, it will be challenging to sell an inherited property without help from an experienced probate attorney and a knowledgeable real estate professional. You’ll want to work with a real estate specialist that is an expert in New York probate laws and procedures. And yes, it is advised to work with both. Whether you were named the executor of the will or court-appointed, you will need experts on your team to get this house sold.
A New York attorney will gather the documents you need for court, draft, and file the probate petition, and speak on your behalf to the judge overseeing the case. She or he will also help collect the proceeds obtained from life insurance, advise on income tax issues or capital gains, and be there throughout the entire process.
A real estate specialist will help you navigate the real estate transaction details that tend to be slightly different from a probate home sale transaction. You’ll want to work with someone that is sensitive and respectful of your family while also keeping the goal in mind of selling the property in the most cost-effective way. Realtors have been known to encourage all sorts of expensive repairs to a home prior to listing. And repairs can get complicated because the executor will need to determine if they are authorized to use estate assets to fund them. A real estate specialist like Leave The Key Homebuyers would suggest selling your property as-is and avoid the hassle of managing repairs to ultimately save you time and money.
Probate Myth #2 – Wills Do Not Have to Undergo Probate Process
This probate myth is false. Yes, will’s have to undergo the probate process, however, there are ways to avoid probate if there is a revocable living trust that holds the estate and all its assets. With a living trust, the owner can manage their assets until their passing. At that point, the beneficiary of the living trust will receive the entire estate without going through probate.
Another scenario is if some of the assets are owned jointly by more than one person, they may avoid going through probate. What happens is the surviving owners would become the owners of the entire asset. Or if the asset has a beneficiary named, it would then transfer ownership upon the owner’s passing without the need for probate.
That being said, most estates will need to go through New York probate, even with a will. But depending on the size of the estate, there may be an option for small estate administration. To qualify, the estate must be valued at less than $50,000. This is also known as a voluntary administration proceeding, and the court doesn’t need to provide oversight for every step of the process, which makes it go faster.
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Probate Myth #3 – Probate Sales Are Always Discounted
Are probate sales sold at a discount? No, this probate myth isn’t true. While going through the probate process in New York, the court usually requests the property to be appraised to determine its value. The court asks this for a couple of reasons, but mainly to note the date of death valuation, which documents the market value of each estate asset at the time that the decedent passed away. This information is required more for tax purposes than real estate, however, it still is important to have. Bypassing the initial appraisal will only delay the probate process.
The nice thing about having this assessment is that it can be used to price the property and list it on the market. To purchase a house in probate, interested buyers must make an offer accompanied by a 10% deposit, which the sellers may reject. The estate representative, through their New York probate attorney, will then submit to the court this offer to validate the sale. Knowing what the market value of the property is, the court may not allow for it to be sold for much less than that.
If the inherited property doesn’t need to be sold during probate and you wait until after the probate process to sell, you won’t need to proceed with court approval.
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Probate Myth #4 – Without a Will, The State Gets Everything
Another probate myth busted, without a will, the state doesn’t get everything. When someone passes away without a will, state laws kick in, and the court will determine who gets what. Generally, a spouse and children are first in line to inherit. So is there a chance assets go to the state? Yes, but this is only when no relatives can be found. As long as your personal representative (the person in charge of wrapping up your estate) can locate an uncle’s long-lost grandchild, the state won’t get your money.
Probate Myth #5 – Costs Eat Up The Estate Assets
You may have heard some scary stories about how much probate costs. If you believe this myth, you might think that your family won’t get anything once court costs are paid, and lawyer fees settled. Fortunately, this myth is just not true.
Generally, only assets owned in the deceased person’s name alone must go through New York probate. And if the value of these probate assets is small enough, the family can utilize probate shortcuts, which are less expensive.
However, if the estate requires formal New York probate, costs are likely to be less than 5% of the estate’s value. These costs include:
- Several hundred dollars to file a probate case
- A few hundred dollars to publish required legal notices
- A couple thousand dollars to hire an attorney to handle everything.
- A few hundred dollars more for miscellaneous costs like certified copies of court documents and appraisals.
But there are two exceptions where probate costs could rise dramatically.
High attorney- fee state– This is something you’ll likely come across in New York. Most lawyers charge a percentage of the estate’s value as their fee instead of charging a flat fee or hourly rate. This can get expensive depending on the value of the estate. However, these fees aren’t mandatory, the executor can look for a lawyer who charges a reasonable price or hourly rate.
Litigation over the estate- If someone contests the will or blames the executor for misconduct, costs can skyrocket. What happens is the estate will have to hire an attorney to defend it, and if the dispute isn’t resolved and goes to trial, it will cost tens of thousands of dollars.
Probate Myth #6 – Oldest Child Isn’t Executor by Default
This probate myth is actually true. Just because you were born first, that actually doesn’t carry in weight when it comes to serving as the executor. If the deceased person named an executor in the will, the court would appoint that person unless there is a reason not to. (Reasons would include if the person has a disability that makes it impossible to do the job or has a felony conviction.)
If there isn’t a will, or the person named as executor in the will doesn’t want to or cannot serve, then the New York court will appoint someone. But the court doesn’t take into account sibling order when selecting the executor. State law dictates who to appoint, which is usually the surviving spouse and then adult children.
Should You Sell Your House in Probate
Selling a house in probate is possible, however, you’ll need to get court approval and include a disclaimer that the deal is contingent on the seller getting probate court approval. The good news is you don’t have to list the property with a realtor and wait for a traditional buyer to come along. If you’d like to keep the selling process simple and fast, working with a “We buy homes New York” company would be a great option. Traditional buyers may not be familiar with the probate process, but a local investor like Leave The Key Homebuyers understands the timeline and buying a house in probate. Working with companies that buy houses Long Island and Nassau County also don’t charge real estate commissions and service fees, and closing costs are negotiable. And preparing the inherited house to sell isn’t necessary. Leave The Key Homebuyers buys houses in as-is condition, no repairs needed, or renovations.
Many New York families going through the probate process work with Leave The Key Homebuyers to avoid the hassle of listing and expense involved with repairs, improvements, and staging. Selling your inherited property this way is quite easy because all you have to do is request a cash offer and pick a closing date, that’s it!
If you’re looking at selling a house in probate, remember to get approval from the court beforehand, to help the process run smoothly. Always check you’re facts if you hear any other myths about probate and selling a house. A good resource is your lawyer, who is handling the estate, they are very knowledgeable about probate laws and what you can and cannot do. So, if you’re ever unsure of something you’ve heard, ask your lawyer for guidance. The good news is that you can sell a house in probate in New York, or you can wait until after probate is closed to sell, whichever option works best for you and your family.