First Post (gulp) - Request for Advice on selling inherited home

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SilverGirl
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First Post (gulp) - Request for Advice on selling inherited home

Post by SilverGirl » Sun Oct 15, 2017 9:10 pm

Hello Bogleheads,

I've been a lurker a few years now, causing me to open a Vanguard account, change my investments in my Fidelity account, and convince my husband to max his 401k. I'm really impressed with the ideas and people here. Wish I had found it sooner. Thank you for the years of free advice that have helped us improve our financial present and future.

Anyway, current topic: my husband's mother passed away a month ago. He is the only child and the sole heir named in her will. I found out how to do probate which is required due to the size of her estate. We did it ourselves to avoid the legal fees. We want to sell the home, as we do not want to be landlords (he has a busy job, I own a small business, and we have a lot of kids).

The house is worth about 300 k (Zillow says 330 so I'm normalizing). She has a home equity loan of 65 k, no other mortgage and no other debts (there is an inherited Non Roth IRA annuity but that will be a separate question. I've asked him to get a copy of the contract so that he can see the details and we can evaluate our options).

We've received many (20+) letters from people offering to buy the house in cash and handle the estate sale. It's so tempting because we are way too busy to spend a lot of time with the process and we don't want it to linger.

Is this a horrendous idea? I know that any offers we get would be lower than market value but if we list it through a realtor they are taking a chunk too, and we'd have to do the estate sale, right?

Bottom line, what do you smart people recommend as the best way to deal with an inherited home in a matter that maximizes profit but does not take too long? I hope this does not sound cold, we loved her and the emotional part of this is completely separate from the math.


Thanks in advance for any advice.

tj
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by tj » Sun Oct 15, 2017 10:00 pm

we'd have to do the estate sale, right?
Not necessarily. If you think there's not too much of value, there are various charities that will send trucks to pick up the stuff. They won't go up stairs, so you could pay a few muscle guys off TaskRabbit to stage the items for the truck. I have no idea the costs of that vs. an estate sale though.


You also could use a rebating realtor, or one who does not charge a commission at all e.g. https://www.goldenkey.com

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Sandtrap
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by Sandtrap » Sun Oct 15, 2017 10:07 pm

One option:
List and sell the home as you would your own.
As mentioned earlier, there are various companies and groups that will either empty the contents of the home at no charge, or bid $$ on the contents competitively.

Katietsu
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by Katietsu » Sun Oct 15, 2017 10:14 pm

I would not bundle these things together based on your description. I would sell the house through a conventional realtor. If you do not want to take the time to handle the possessions yourself, you can hire a company to do the estate sale of the belongings. The company used when my aunt passed away also brought in a dumpster and tossed anything not deemed worthy of selling.

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baconavocado
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by baconavocado » Sun Oct 15, 2017 10:34 pm

Having gone through this myself and with friends a couple times recently, I would recommend the following:

1. The contents are probably not worth much. Take what you want and what your close relatives want, donate what you can, and rent a dumpster to discard the rest.

2. Sell the house on the open market through a local, reputable agent that is recommended in the neighborhood and has several recent sales on their record. An open market sale is the only way of assuring a fair price. Study the comps and make sure the agent is not under-pricing the house which makes their job easier but sells you short.

3. This is a lousy time of year to sell a house. You may want to wait until next spring unless the house cannot be made secure. You may want to get a pest inspection and have any repairs/cleaning/painting done during the winter so the house is ready to go in the spring.

4. Don't drag your feet. An empty house is not good for the neighborhood, can attract vandals, and isn't good for your bottom line. You want to get those assets invested in the stock market ASAP.

Best of luck and sorry for your loss.

123
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by 123 » Sun Oct 15, 2017 10:52 pm

Been through this a couple of times over the years due to deaths of relatives. Consider selling the house "as is" and leave appliances and furniture you don't want in it. That will reduce the amount of stuff you have to remove. In going through personal goods think critically, if there's little chance an item would be attractive for sale at a Goodwill (for example) just toss it in the recycle/dumpster. It's hard to do this at first but after a couple of hours you may get pretty ruthless at it. Typically you find come across a lot of clothing/linen/bedding. Just think how old it really is and you'll realize that the rag bag/recycle/dumpster is really the best way to handle it. The deceased got their fair use out of the stuff, it has served the purpose for which it was acquired. It's time to move on. Good luck.

I'd ignore all the letters from the people that help people get rid of estates and buy "ugly" houses. Only you can protect your own interests.
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curmudgeon
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by curmudgeon » Sun Oct 15, 2017 11:06 pm

If there is a substantial amount of good furnishings and other stuff that you don't want, you can look into hiring an estate sale firm to handle selling the stuff. Typically they would look over the place and bid a percentage or fixed amount to handle the sale AND to clear away anything else. Just make sure you know what are the high value items and have a clear understanding of who is taking care of what. Get some references.

Oh, and I agree with keeping the real estate sale separate from the contents sale/disposal.

Carefreeap
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by Carefreeap » Sun Oct 15, 2017 11:10 pm

For north of a $200+ "profit" I'd be doing my homework and interviewing three reputable local agents to get an idea of what the market is given it's "as is" condition. Then decide if any of those low-ball offers are actually worth it. Sorry for the guilt but my parents would have been very disappointed in me if I didn't make my best efforts to honor their estate.

As others have said, beyond the items that are of sentimental value to your husband and you, the personal property is unlikely to be of much value. Ironically, sorting through my late mother's personal stuff was actually the most emotionally draining part of settling her estate even though from a financial point of view the lowest return on my time. I was grateful that between my brother and his extended family and my mother's friends I only had a small pile of costume jewelry left (which I gave to the girls who help me clean her home) and a few clothes to donate to charity.

Good luck, I know this isn't an easy process but you'll regret it if you don't give it your best efforts.

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FIREchief
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by FIREchief » Sun Oct 15, 2017 11:43 pm

SilverGirl wrote:
Sun Oct 15, 2017 9:10 pm
We've received many (20+) letters from people offering to buy the house in cash and handle the estate sale. It's so tempting because we are way too busy to spend a lot of time with the process and we don't want it to linger.
I would respond to all of the people offering to buy the house. To the high bidder, I would say "thanks, I'll get back to you in two weeks." To all others I would say "I have been offered (high bid) and you have a week to make a higher bid." See what happens.... 8-)
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

psteinx
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by psteinx » Mon Oct 16, 2017 12:19 am

I have not been in this situation. But I might approach it as follows...

I'm assuming he has full authority to do all this as sole heir. If there's doubt, research that issue....

There are a number of tasks involved:

1) Remove items of personal interest (photos, keepsakes, etc.)

2) Remove items not of personal interest that you want for yourselves (extra TV or nice dresser or whatever)

3) Catalog the key remaining items (to be sold/disposed). i.e. What's valuable? Perhaps not much, but at least look for jewelry box and the like.

4) Someone needs to sell the valuable stuff (from 3)

5) Someone needs to sell the low end stuff, if there's enough to merit an estate sale

6) Someone needs to clear the remaining junk

7) Someone will ultimately, most likely, spiff up the remaining house some - a very thorough cleaning, fresh paint as warranted, thorough floor surface cleaning, tidy up the landscaping, etc.

8) Sell house

OK, so the point is, YOU can decide which of these tasks to assume yourself, which to manage, and which to offload.

Probably you want to do 1-3 yourself, for fairly obvious reasons.

If you sell to a company that handles the house, junk included, then you're offloading steps 4-8 to someone else. That may be a good idea, or may not. Obviously, factors like you and your spouse's time, expertise, and distance from the house are among factors to consider.

I'd probably at least get a quote or even just a ballpark from some of the folks sending you letters. Have some idea of your alternative.

Then look at what the house would sell for in decent selling condition (after step 7), deduct commissions, closing costs, etc., and then adjust that estimate for items 4-7. You'll get some idea of the amount of money at stake - i.e. what you're giving up by offloading, should you go that route.

For items 4-8, you can assign them individually to different contractors. An estate sale company for 5 and maybe 4. A junk clearing company and/or just calling Goodwill (if they'll accept it) for 6. Various contractors for 7. You can sell the higher value, compact items (#4) yourself in various ways and let an estate company handle the bulk items. (Though the estate company will balk if all stuff with much value is stripped out and all they are asked to sell is old clothes and low value furniture and the like).

I guess, bottom line, it's not all or nothing. Evaluate all the steps, your options, costs, time availability and the like.

Afty
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by Afty » Mon Oct 16, 2017 12:32 am

I had to deal with this when my last parent passed away a few years ago. I did not rush into things. First, I got an appraisal to establish the cost basis. For you, this would be useful to determine whether the cash offers you’re receiving are fair (I would guess they are not). Next, I made needed repairs to the house. About 9 months after my parent's death, I emptied the house of the things I wanted to keep and hired an estate sale company to get rid of everything else.

I then hired a real estate agent recommended by people in the community and put the house on the market for the appraised value. It took a few months but it eventually sold for full asking price. Once the house went on he market, the agent took care of everything, and I only had to be involved to respond to offers and sign papers. It wasn’t bad time wise, and emotionally it helped to have nearly a year of time to come to terms with the loss of my parent.

So my advice would be not to rush, to get an appraisal now, and to prefer using an agent to sell the house.
Last edited by Afty on Mon Oct 16, 2017 12:44 am, edited 1 time in total.

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Pajamas
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by Pajamas » Mon Oct 16, 2017 12:38 am

It sounds like you don't have time to deal with the house and its contents. If you can sell it to someone who will take care of everything and get almost what you would if you took care of everything yourself, it might be worth it to go that route. A 6% commission for the real estate agent on a $300k house is $18k so that definitely gives some room to make it possible. An investor willing to deal with everything is also making money from improvements and flipping or renting it, so you could end up with about the same financial outcome either way. What you might need is a good appraisal to determine the value.

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celia
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by celia » Mon Oct 16, 2017 1:57 am

I hope you've already forwarded your MIL's mail to your house. One effective thing I did with all the mail was to buy 20-30 blank postcards from the Post Office and write a message on the non-stamp side that "<name> and <address> has died. Please remove from all mailing lists." Then as mail comes in and it is from someone you don't want to hear from again, address a postcard to them and mail it. I also recorded who I was notifying, but never had to refer to the list.

I would personally go through all the drawers and closets and look for papers (letters, tax returns!, bills, photos, etc) and money and jewelry and throw it in a cardboard box to take home. Depending on the kids' ages, they could help you in the "treasure hunt". They may even remember grandma in their own ways with a love for a particular stuffed animal, game, or kitsch of hers. Let them each take one or two items to help remember her. You might want to assign clothes pockets for one kid to go through. (I know someone who had an estate/garage sale and after two or three customers had found money in the pockets of clothes they were buying, they pulled all the clothes and purses from the sale until they could be gone through individually.) If you leave this up to someone else, you will probably never hear of any "treasures" that were found. And if someone finds a SSN on a financial paper, you might be stuck cleaning up an identity theft problem. It happens.

Sometime, check your MIL's state's unclaimed property website for her name and your FIL's (if he has died too). Things can show up on there even a few years after death (when a company holding some of their money doesn't hear from them for a few years). It can be as simple as an uncashed/lost rebate check or as expensive as 2 weeks worth of final pay.

not4me
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by not4me » Mon Oct 16, 2017 10:56 am

As with many things real estate related, the answer is "it depends". Several good ideas have been thrown out here & they'll all work in certain cases & likely not in others. What works in a "hot" area of a larger city won't in a "dying" area in a small town, etc. Since you've got a ballpark idea for how much the house is worth, I'd do some quick, high level discussions with both one of those services & at least 1 reputable real estate agent. You may get a much better feel for how much you might net dollar wise & time wise. In general, agents prefer to show houses that aren't cleared/cleaned to the bare walls. Other cases, that is preferable. The agent may have contacts to facilitate that however. I have a friend who (with siblings) sold their parents house "as is" including contents at an auction. Beautiful weather, etc had a big turnout & they netted more than they thought house was worth. Of course, if it had rained that day, they may have lost big.

I don't have direct experience in dealing with a home equity loan on a house going thru probate, but I'm guessing that will have to be handled before probate closes. If so, speed to closing of the sale may be a bigger factor than it would be otherwise. Also, you may want to check the homeowners insurance on the house; some (many?) don't cover a "vacant" house when no one lives there for a while.

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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by cherijoh » Mon Oct 16, 2017 11:57 am

baconavocado wrote:
Sun Oct 15, 2017 10:34 pm
Having gone through this myself and with friends a couple times recently, I would recommend the following:

1. The contents are probably not worth much. Take what you want and what your close relatives want, donate what you can, and rent a dumpster to discard the rest.

2. Sell the house on the open market through a local, reputable agent that is recommended in the neighborhood and has several recent sales on their record. An open market sale is the only way of assuring a fair price. Study the comps and make sure the agent is not under-pricing the house which makes their job easier but sells you short.

3. This is a lousy time of year to sell a house. You may want to wait until next spring unless the house cannot be made secure. You may want to get a pest inspection and have any repairs/cleaning/painting done during the winter so the house is ready to go in the spring.

4. Don't drag your feet. An empty house is not good for the neighborhood, can attract vandals, and isn't good for your bottom line. You want to get those assets invested in the stock market ASAP.

Best of luck and sorry for your loss.
+1
Good advice. When my mom passed away 11 years ago, my brother (who lived in the vicinity) did all the grunt work and spent many weekends hauling stuff to the dump in his truck. We didn't think about renting a dumpster or hiring a crew to do the grunt work.

I got a referral for a realtor in my Mom's area from a well-respected realtor who lived in my neighborhood. (I had contacted her to ask her advice about how we determine which local realtor to use, but she volunteered to check her network of contacts for a recommendation). My brother also identified some local realtors by calling the big firms in the area. We interviewed 3 or 4 realtors and asked for a comparative analysis of the house. They all came back with about the same price range, but their level of professionalism varied greatly - one realtor cancelled at the last minute - a real inconvenience since we were not staying in the house and had driven over from my brother's for the appointment. (That guy was immediately kicked to the curb). The referred realtor was our first choice by far and we engaged him to list the house. FYI - I would definitely NOT use Zillow or any of the free online services as the basis for what your house is worth - it is notoriously inaccurate.

Mom had redecorated the living room a few years before her death and the formal dining room furniture was in great shape since it had been rarely used. The realtor suggested leaving that furniture and the area rugs to stage the house. We donated the rest of the furniture and cleared out everything else before putting the house on the market.

We received two low ball offers right off the bat since they could tell the house was empty, but the realtor suggested passing on them. We did get a qualified offer very close to listing price after a couple of weeks which we accepted. This was late spring 2006 and the housing market was already softening in the DC area where my mom's house was located. The realtor helped ensure that we sold at a good price but that the house didn't linger on the market. Had we dragged our feet we might have ended up in the situation of having to catch a falling knife when the housing bubble really burst. IMO it was well worthwhile to use a professional.

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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by fouroheight68 » Mon Oct 16, 2017 12:07 pm

I've been on the other side of this - as the real estate investor. If you are going to sell to an investor, just go into it realizing you are not going to recieve "top dollar", but rather the easiest transaction possible. I am currently in negotiations with an estate for a similar situation. The house has structural issues, which prevent it from being sold on the open market. It is a time capsule from 1971, and has horrendous odors. I am a Realtor and Contractor, and ran the comps after repairs around $600,000. I estimated $90,000 in renovations, and after my hard money lender fees, holding costs, and desired profit I came to the owners with an all cash offer of $350,000. They came back with an appraisal of $515,000 so obviously we are stalled.

The bottom line here is, an investor needs to have a certain amount of profit built in (usually 15-20%). If you are OK with selling 20% under value in exchange for the ease of the transaction then go for it! Otherwise, a little sweat equity and listing it with a realtor on the open market goes a long ways.

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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by gunn_show » Mon Oct 16, 2017 12:30 pm

Katietsu wrote:
Sun Oct 15, 2017 10:14 pm
I would not bundle these things together based on your description. I would sell the house through a conventional realtor. If you do not want to take the time to handle the possessions yourself, you can hire a company to do the estate sale of the belongings. The company used when my aunt passed away also brought in a dumpster and tossed anything not deemed worthy of selling.
This. Sell the house as you normally would, will help get the highest return. If you live in a large town, there are lots of folks that will handle the estate sale on a contingency basis (usually split proceeds 50/50 with a minimum guaranteed return) and also either get the remaining stuff to donation places or just take it to the dump for you. Then sell the house as-is and move on. We just did this with my grandma's house and it went just fine.
"I love competition. And I want to win." R. Murdoch

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BolderBoy
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by BolderBoy » Mon Oct 16, 2017 1:49 pm

You might contact an auctioneer. Houses sold at auction are generally not subject to contingencies and are sold "as is, where is", let the buyer beware. The auctioneer could sell the contents as well (or at least tell you if such is worthwhile for him and therefore, for you.)

I recently went this route and the entire estate was emptied and settled in 6 months. (the property was located thousands of miles from where I live so lingering would have been very inconvenient)

My condolences to your husband...
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deikel
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by deikel » Mon Oct 16, 2017 7:37 pm

- ignore those letters, professionals trying to take advantage of grieving people and offer 'convenience'...not my cup of tea
- separate the estate sale from the real estate sale
- either take the time to go through the possessions as a useful form of mourning (if needed), find some muscle to clean it out or find an auctioneer to do the hole work for you. They come in and bring everything outside to auction off, you get first pick on a couple of items, they do the sale and take their cut. You can hire them to put everything left after auction in a dumpster (or two or three)
- find a real estate agent to list the home and show and sell

You can also do the estate yourself, I had to do this a couple of times and its not that much work (especially if you are not too emotionally attached) - get a couple of dumpster delivered up front, get some muscle (student for hire) for a specific day on the weekend. Let them parade everything before your eyes and you decide to toss or keep, toss in dumpster or keep in your van. Should not take more than two days.
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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by Curlyq » Mon Oct 16, 2017 8:40 pm

When my grandmother died, my mom and her siblings found over twenty thousand dollars in small lots, hidden in books, in greeting cards, and in other papers. They didn't think their mother had any assets when she died. When my dad died, my sister found items of his that were really touching and special and we displayed these things at his funeral for others to see. I would recommend going through his mom's stuff before getting rid of anything.

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Re: First Post (gulp) - Request for Advice on selling inherited home

Post by LarryAllen » Mon Oct 16, 2017 8:49 pm

I deal with investors a lot in probate settings and regardless of what they say they will only be paying an amount that gives them a pretty good profit when they flip it. I thus would only sell to an investor if you don't mind paying a big chunk for getting rid of the house. Whatever you do though don't rely on Zillow for value. Talk to a Realtor or two and have them run comps. In some areas zillow is right on and in others it's significantly off. The investors know exactly what the house is really worth and so should you. Plus, I have seen some Realtors that are true full service. They will literally organize new paint (if needed), handyman work, clean out the house, etc... and then list it for sale. I am not a Realtor but to me paying 4-6% is worth it when they do their job well.

Also, you say you have done the probate yourself. I have seen a lot of do-it-yourselfers mess it up in my state. Some states are easier than others of course. You might confirm with a title company that everything is clear so the house sale doesn't get bogged down by a probate glitch. Again, the Realtor can connect you with a title company and they'll run a preliminary title report for no charge usually.

Good luck.

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