Executor of Will - Selling House in Poor Condition

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DarkHelmetII
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Executor of Will - Selling House in Poor Condition

Post by DarkHelmetII » Tue Apr 16, 2019 5:49 am

The "Facts"
1) Spouse is executor for the will of a recently deceased family member
2) House is part of the estate
3) $55k owed on the house, I do not know the interest rate
4) Taxes ~ $500 / month (high real estate tax area)
5) Comparable house in "normal" condition worth around $180k (very high level / quick swag)
6) House in bad shape: a) incredibly cluttered, b) kitchen needs substantial work, c) bathroom needs substantial work, d) some of the floors feel like they are sloping, and e) some noticeable cracks in the wall (informal opinion from brother-in-law says this looks like a less worrisome form of settling)
7) Spouse has significant opportunity cost in that she works intense professional job, plus we are parents
8) Spouse and I live 2-hour flight away
9) There is already some tension within family on how to handle house - not a money grab (there's not much equity given the condition, and beyond that I don't see people grabbing for money) but on how to handle given the condition
10) There is some family within 1 - 2 hours drive of the house, but hey, who's got time for this (point is, that even with other family closer, everybody's busy and this is a time suck for everybody and anybody)

Please Opine
1) I see two options: a) sell house 100% as-is, or b) put $5,000 - $10,000 into the house, particularly kitchen and bathroom, to make the place livable
2) I have a bias toward "a" unless otherwise proven that "b" makes sense
3) Get opinion of two realtors on "a" vs. "b" - point is not to over-analyze, but to complete a minimal "due diligence" so that we can move forward based on some external / objective / "expert" opinion
4) Set a specific target date, 4 - 6 weeks from now, to list the place and timebox the situation

JoeRetire
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Re: Executor of Will - Selling House in Poor Condition

Post by JoeRetire » Tue Apr 16, 2019 5:55 am

There is already some tension within family on how to handle house - not a money grab (there's not much equity given the condition, and beyond that I don't see people grabbing for money) but on how to handle given the condition
No idea what this means. Does a family member want to purchase the home? If so, consider that option.

Otherwise:
- Get opinions from local realtors.
- Based on their input, decide if an investment of your time and the estate's money is worth it or not.
- Make a decision and move forward.

Sometimes a minimal investment in painting and cleaning is necessary to make it salable, but anything beyond that won't return the investment. A good realtor can help you determine if that is the case.

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DarkHelmetII
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Re: Executor of Will - Selling House in Poor Condition

Post by DarkHelmetII » Tue Apr 16, 2019 6:07 am

JoeRetire wrote:
Tue Apr 16, 2019 5:55 am
There is already some tension within family on how to handle house - not a money grab (there's not much equity given the condition, and beyond that I don't see people grabbing for money) but on how to handle given the condition
No idea what this means. Does a family member want to purchase the home? If so, consider that option.
Fair point, let me clarify. There is a TON of stuff to flip through. Owner was an absolute hoarder, stacks of comic books, movies, papers etc..., amazing how much junk could be crammed into 860 square feet. Four adults over two hours barely scratched the surface. My spouse wants to "give it time" to go through everything thoroughly, for example we've found $100's of dollars found within books. Spouse's sibling and significant other are more of the mindset, let's just clear it out, sure we're going to lose a few bucks "hidden" in there but time is money and we will be on an endless mission to find everything little thing of any value before trashing or selling in bulk. Not that it matters so much, but I am definitely of the mindset to accelerate getting the junk out ASAP recognizing a few dollars in hard cash or possibly in collectibles will be lost.

Does this help?

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Re: Executor of Will - Selling House in Poor Condition

Post by JoeRetire » Tue Apr 16, 2019 6:11 am

DarkHelmetII wrote:
Tue Apr 16, 2019 6:07 am
Fair point, let me clarify. There is a TON of stuff to flip through. Owner was an absolute hoarder, stacks of comic books, movies, papers etc..., amazing how much junk could be crammed into 860 square feet. Four adults over two hours barely scratched the surface. My spouse wants to "give it time" to go through everything thoroughly, for example we've found $100's of dollars found within books. Spouse's sibling and significant other are more of the mindset, let's just clear it out, sure we're going to lose a few bucks "hidden" in there but time is money and we will be on an endless mission to find everything little thing of any value before trashing or selling in bulk. Not that it matters so much, but I am definitely of the mindset to accelerate getting the junk out ASAP recognizing a few dollars in hard cash or possibly in collectibles will be lost.

Does this help?
IMHO...

Your spouse is the executor, so gets to make that decision. You and the siblings can make your views known, but then need to back off.

Personally, I'd make a single pass through the house and find what I could. Then I'd hire a company to clean everything else out. But again, the executor is the sole decision-maker here.

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Re: Executor of Will - Selling House in Poor Condition

Post by bampf » Tue Apr 16, 2019 6:29 am

JoeRetire wrote:
Tue Apr 16, 2019 6:11 am
DarkHelmetII wrote:
Tue Apr 16, 2019 6:07 am
Fair point, let me clarify. There is a TON of stuff to flip through. Owner was an absolute hoarder, stacks of comic books, movies, papers etc..., amazing how much junk could be crammed into 860 square feet. Four adults over two hours barely scratched the surface. My spouse wants to "give it time" to go through everything thoroughly, for example we've found $100's of dollars found within books. Spouse's sibling and significant other are more of the mindset, let's just clear it out, sure we're going to lose a few bucks "hidden" in there but time is money and we will be on an endless mission to find everything little thing of any value before trashing or selling in bulk. Not that it matters so much, but I am definitely of the mindset to accelerate getting the junk out ASAP recognizing a few dollars in hard cash or possibly in collectibles will be lost.

Does this help?
IMHO...

Your spouse is the executor, so gets to make that decision. You and the siblings can make your views known, but then need to back off.

Personally, I'd make a single pass through the house and find what I could. Then I'd hire a company to clean everything else out. But again, the executor is the sole decision-maker here.
This is also possibly not a financial decision. My father passed a couple years ago. I wanted nothing to do with his estate for a variety of reasons. Others wanted to sift and sort as though there was some meaning attributed to his stuff. Perhaps your spouse wants to grieve a bit as a part of this process. No idea, I'm just guessing. That being said, its possible.

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Re: Executor of Will - Selling House in Poor Condition

Post by Jack FFR1846 » Tue Apr 16, 2019 6:41 am

My wife's aunt recently moved to assisted living, leaving the 130 year old 3 decker house in horrible shape. 3 level porch settled so much there was a 2 foot gap between one porch floor and the post going to the next level. Paint is all lead, insulation is all asbestos, some wiring knob and tube, oil tank leaking, hoarding behavior has interior piled with junk. 2 junk cars had been abandoned on the property through a rear entrance from an active ally.

Family cleaned enough to ensure that the random envelopes of cash were retrieved, usable things sorted and clothes that could be used or donated taken. Then we paid a company (remove junk kind of place) $500 to go through the place. House put on the market "as is" and sold for 130k to a family of workers who planned to self renovate and live in the house, renting the top 2 floors. Zillow estimated the house at $295k. I feel the price paid was a miracle. I'd have thought it would have brought no more than $80k, but the real estate guy was very good finding an appropriate buyer.

I think if I were in your shoes, I'd push for a deadline for all work on the house. Maybe 6 months. If the family members who don't want to immediately sell do come and work on the house, fine. If not, it goes.
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bberris
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Re: Executor of Will - Selling House in Poor Condition

Post by bberris » Tue Apr 16, 2019 6:41 am

Sell quickly as is.

Taxes are 6,000 on a house worth maybe 130,000?? Get rid of it fast.

gtd98765
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Re: Executor of Will - Selling House in Poor Condition

Post by gtd98765 » Tue Apr 16, 2019 6:44 am

Regarding the house's contents, you might want to engage an estate sale company like Maxsold.

The house will show better once it's empty, but given the logistics I would move quickly to sell the place as is. since you did not live in the house you are probably not aware of its real condition; there could be hidden defects that would emerge in a home inspection. Or you could engage a contractor to fix an obvious problem, and in the course of that work he stumbles on some other, even bigger problem; what do you do then? Let someone who lives nearby buy it and renovate it, and assume the risk of doing so; if that person flips the house for a profit you could have had, so be it.

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Re: Executor of Will - Selling House in Poor Condition

Post by RickBoglehead » Tue Apr 16, 2019 6:51 am

Executor makes the call as stated.

My FIL was a hoarder. Not stacked up stuff in living spaces, but attic full, garage rafters full, garage full, boathouse full including rafters, and boats. Started emptying house in summer of 2014, 3 people doing roughly 3 - 4 days of work, then a few days off, then repeat. Then again summer of 2015, and part of summer of 2018.

No cash found. Many "treasures" were junk. Some "junk" was a treasure. Been selling items in garage sales first summer (mostly waste of time) and Craigslist. Huge amount of time. Excluding selling a trailer and a boat, over $20,000 worth. Took over 8 tons of scrap to scrap yard including a lot of copper wire, total of nearly $4,000. Again, this took an incredible amount of time, but we wanted to use the cottage not sell it, at least initially.

For another relative, apartment out of state. Paying rent. Sold items on Craigslist in less than 1 week, loaded up U-Haul with other items and papers, and drove home (large basement, you could put into storage, estate pays for storage). House can then be sold, items gone through over some period if you think reward (cash hidden, "valuable" items) is worth more than transportation and storage. When we did this, other relatives made fun of expenditure on U-Haul trailer. Ended up netting over $2,000.

Note that executor can be paid for their time, subject to state laws. For out of state estate above, other heirs agreed to $50 per hour plus costs (mileage, etc.). We did this at the same time as first estate, so having more Craigslist listings was non-issue.

Note that realtors are playing you in a way. If you bring in "experts" to assess house, what you learn must be disclosed to potential buyers. If you sell house "as is" with no experts, then you have no knowledge of what is, or what is not, wrong with the home. If experts come in and you sell house as is, make sure you know exactly what you must disclose to potential buyers.
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Re: Executor of Will - Selling House in Poor Condition

Post by rich126 » Tue Apr 16, 2019 7:04 am

A while ago I got a good deal buying a house from an estate. Apparently it was originally a mess but they did go through and remove everything and did a cleaning. They made no real effort to "modernize" the house. I certainly got a good deal because they wanted a quick sale. And since then I've had every room repainted, both bathrooms had to get redone and so did the kitchen. Basically the house was from the 1970s with the greenish-yellow paint in many rooms.

Structurally it was sound and while I put in some time and money, I'm going to be selling it soon and certainly will recover my expenses.

Personally I think the executor should get the house cleaned prior to selling it.

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8foot7
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Re: Executor of Will - Selling House in Poor Condition

Post by 8foot7 » Tue Apr 16, 2019 7:15 am

The solution is to have an estate sale. The place will be empty by the time the sale is over, and anything left the estate sale folks can haul off to charity or the dump for an extra fee. They'll take some absurd percentage of the profits but then again they handle everything, and I mean everything. Most hands-off thing I've ever seen.

In my MIL's case, she died in mid-February. My wife gave everyone a deadline - May 1 is when everything still in the house is up for sale, so if you want things, come and get them and arrange to have them shipped. (MIL died in NC, family in Oregon, Washington state, and California.) Most folks just said, ah, whatever, not worth the time. One family member did get a POD arranged and loaded it up with goodies.

The estate sale people staged for two weekends in May and then after Memorial Day the sale was held and by June 4 or 5 the whole place was empty. We hired a deep cleaning crew to come shampoo carpets and scrub every inch of everything, which was super easy since the house was empty, listed the place on a Friday and had it sold by the following Monday.

It was a newer house so not much in the way of repair was needed, but our attorney advised us we had almost no liability for disclosing anything about the house since we were only selling it to administer an estate. On the property disclosure form we checked "are not disclosing" for just about everything.

It was such a smooth process. I remember that feeling I had in the pit of my stomach when MIL died and we went in the house and saw its condition - she might not have been a hoarder but she didn't throw much away. And it was just magically handled. Worth every penny, though like I said you are giving up half of more of the value of your stuff. I would absolutely do it this way again.

In your situation, OP, at a carrying cost of $500/mo just in taxes (forget utilities and mortgage) I'd absolutely have the house sold asap. Whatever treasures you find have a high bar to overcome that tax burden, and I suspect those treasures won't make it into the estate to mitigate the tax expense either :happy

Also, words of advice to your spouse: everyone has feelings or opinions but spouse was chosen as executor for a reason. After the first few weeks, spouse would do well to let everyone know spouse will be making a final decision and the time for input or sharing opinions on how things will proceed is over. Different family dynamics will mean spouse'll need to find the vocabulary to say that, but it will need to be said.
Last edited by 8foot7 on Tue Apr 16, 2019 7:31 am, edited 3 times in total.

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F150HD
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Re: Executor of Will - Selling House in Poor Condition

Post by F150HD » Tue Apr 16, 2019 7:19 am

IMO, start w/ a dumpster and remove all 'clutter'. Then reevaluate.

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Re: Executor of Will - Selling House in Poor Condition

Post by carolinaman » Tue Apr 16, 2019 7:40 am

I think the house should be emptied of clutter first. You can do this one of two ways. One, just clear everything out indiscriminately without any attempt to save anything. Two, sort through things to make sure valuables and family keepsakes are not thrown away. This seems to be your wife's desired approach and it is the way I would do it. This will take more time, but not as much as you might think.

Once the house is decluttered, talk to some realtors and get their recommendations for any cleaning, painting, etc. They will also know people who can do these things for you. They can advise you on the "sell as is" approach versus a modest investment to make it more presentable and sellable. There are always investors will to buy "as is" but often their offers are real low ball prices. She may get a much better price by making modest improvements. I think realtors can give you a better perspective on that.

I think you should respect your wife's desires about how to handle this and support her whichever way she goes. She does not need added pressure from you as the pressure of being an executor, especially with family members disagreeing, is pressure enough.

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Re: Executor of Will - Selling House in Poor Condition

Post by FBN2014 » Tue Apr 16, 2019 8:17 am

First off I would not be telling your spouse what to do unless she asks your opinion. We had a similar situation with my MIL's house after she died. Lots of clutter and repairs needed. One of the heirs, a brother, said he would fix up the house on weekends so that it could be sold for top dollar. Two years later it was still in bad shape and ended up being sold in "as is" condition to an investor. IMHO I would sell "as is" but I would find out from a realtor what the value would be if it was repaired and updated. Then I would get an estimate from a contractor as to the repair costs. Then I would use this formula to figure out what to sell it for since only an investor will buy. The formula is After Repair Value X .70 minus the repair costs = sales price. This is the formula most investors who do rehabs use to figure out what to pay. You should also be aware that if a house is vacant for any extended period of time many homeowners insurance policies become void and will not pay if a claim is filed. A vacant house is a good target for vandals and squatters.
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Buford T Justice
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Re: Executor of Will - Selling House in Poor Condition

Post by Buford T Justice » Tue Apr 16, 2019 8:35 am

I think everyone needs to be paid for their time and effort.

Does this change the dynamic?

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Watty
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Re: Executor of Will - Selling House in Poor Condition

Post by Watty » Tue Apr 16, 2019 8:39 am

DarkHelmetII wrote:
Tue Apr 16, 2019 5:49 am
3) Get opinion of two realtors on "a" vs. "b" - point is not to over-analyze, but to complete a minimal "due diligence" so that we can move forward based on some external / objective / "expert" opinion
I would do telephone interviews with at least six real estate agents to find one that would do a good job with selling a house in that condition.

In many markets the spring and early summer are the prime selling season so if you take six months to get it ready to sell it could be very hard to sell if you don't put it on the market until next fall.

One problem to consider is that if the sale of the house is delayed is that if the house is now owned by several siblings then if one of them dies before the house is sold then the house will be pretty much impossible to sell until their estate is settled, then you will also have to deal with their heirs.

One other thing to also check on is that the home insurance may not be valid, or limited, if the house if vacant for more than a month or two. Be sure to check with the insurance agent to find out how the current policy covers a vacant house. If teenagers get into the house and "party" it could be burn down and the insurance might not cover it. If one of them is hurt then you would also need to worry about being sued and not having insurance that would cover you.

There could be a lot of advantages to selling it fast.
Last edited by Watty on Tue Apr 16, 2019 8:42 am, edited 2 times in total.

depressed
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Re: Executor of Will - Selling House in Poor Condition

Post by depressed » Tue Apr 16, 2019 8:40 am

Because of my DS, my mind naturally goes to the comic books. DS says they could be just junk or could be valued at more than the house. What vintage?

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Re: Executor of Will - Selling House in Poor Condition

Post by dm200 » Tue Apr 16, 2019 8:46 am

Good advice so far.

- Hire a company to "declutter" the house - get rid of all the junk. There actually might be something in all that stuff worth keeping, either for financial or sentimental reasons. Find a company that will work with you .

- Get advice from realtor on how much to do to fix the house for sale

- sell it asap

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Re: Executor of Will - Selling House in Poor Condition

Post by dbr » Tue Apr 16, 2019 8:54 am

It seems to me selling as is would be the logical alternative to a costly and time consuming process to make the house habitable and up to code to put on the regular market. It does not seem anyone is prepared to invest the time and effort to do anything else. We had a similar case and handled it by having family and friends of family go through the stuff and take anything they wanted and then had a realtor find someone who would take the house as a rebuild including hauling off the contents and taking the interior down to studs. Also the yard had to be landscaped.

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Re: Executor of Will - Selling House in Poor Condition

Post by tadamsmar » Tue Apr 16, 2019 9:08 am

If I were the executor, the first thing I would do is determine my powers and responsibilities. I'd review this document:

https://www.nccourts.gov/assets/documen ... 1aWnKA7nNK

(But that document is for my state)

Then I would conform to that.

In my state, a busy executor can pay people to do stuff in conformance with the procedures and pay the bills from the estate account, but they must choose responsible agents like a business and keep records and file the records with the court as required. If they choose family members, then the family member should keep records like a contractor if they want to get paid. All work on a house should conform to the local building codes (possibly just the rehab codes) and building permits should be obtained when required.

Anything that conforms to the rules is OK. The executor can do what the family wants just to ease tensions as long that it conforms to the rules. Or they can do something else that conforms to the rules.

The executor can also resign and let the courts appoint another executor in my state. In my state, an out-of-state executor has to post a bond.

It's probably not necessary to sell the house. It can probably end up being owned jointly when the estate is closed, or owned by one person depending on what conforms to the will. The executor can probably get a professional appraisal of the property as is. I once divided and sold half of an 800,000 farm with a rental house with only one day trip, and that trip was just to oversee working out odd issues with the property line after a survey. One can do a lot of stuff remotely, even close on a property.

If I were the executor and wanted or needed to sell it, I think I would just find a good realtor and take the realtor's advice on the range of possible sale strategies.

Basically, you act like a responsible business (not like the Corleone family business) and some family members may get huffy because they are not used to having a non-Corleone-style business relationship with other family members. If you don't act like a responsible business in my state, you can potentially get into big trouble.
Last edited by tadamsmar on Tue Apr 16, 2019 9:33 am, edited 1 time in total.

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Re: Executor of Will - Selling House in Poor Condition

Post by davewi » Tue Apr 16, 2019 9:32 am

I was just in a similar situation. Here is what I did:
1. Have the relatives meet at the house and pull out the relatively few items of sentimental and financial value. Divvy them up in as fair a way as you can.
2. Call 1-800-GOT-JUNK or similar company to clear out the rest of the stuff. You can have this done on the same trip to the house as step 1. This was fast and relatively inexpensive.
3. Find a realtor
4. Based on my realtor's recommendations, I had the inside of the house painted, pulled up the ratty carpeting and refinished the hardwood floors underneath, and then cleaned. Total cost was less than $10K. The realtor managed the work and I never had to be on site. I think this added more than $10K to the eventual selling price of the house.
5. List the house and sell it. Take what you can get - you're not trying to get every last penny out of the place. Your time has a cost, plus it costs money to carry the house (taxes, utilities, lawn care, etc.) while it's listed.


One thing to remember is that the current homeowner's insurance probably lapses after the house is unoccupied for 30 days. You'll have to either find other coverage (difficult to get and expensive) or have the estate take on the risk of an uninsured house.

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Re: Executor of Will - Selling House in Poor Condition

Post by NotWhoYouThink » Tue Apr 16, 2019 9:43 am

3 factors here -
The house
The stuff
The family


The family will still be around after this is over, so if she can be flexible (not the same as being a doormat) while still executing her responsibilities that would be a good thing

If she wants to spend a few weeks making trips back to go through stuff and make sure any treasures find homes within the family, that might be a valuable part of the grieving process, even if it costs a couple of months of tax/utility/insurance payments. A few weeks, preferably not a few years.

Sounds like no family members live near the house or would want to own it, and there aren't any seasoned house-flippers in the family. This isn't a skill you want to learn while executing the estate. I would spend some money cleaning the house out and put it on the market as is. A realtor might advise you to do some upgrades, but that would make the realtor's life easier, it wouldn't necessarily net you more for the house. Listen carefully(skeptically) to any such recommendations.

If there are estate sale companies that operate in the area (check estatesales.net and the zip code of the house to find them) she could have them look over the stuff after the sentimental pieces have been handed out to determine whether it would be better to have an estate sale or to pay the junk man to clear out the mess. If no estate sale company is willing to take it on, that would be a clue.

Good luck.

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Re: Executor of Will - Selling House in Poor Condition

Post by One Ping » Tue Apr 16, 2019 9:47 am

davewi wrote:
Tue Apr 16, 2019 9:32 am
One thing to remember is that the current homeowner's insurance probably lapses after the house is unoccupied for 30 days. You'll have to either find other coverage (difficult to get and expensive) or have the estate take on the risk of an uninsured house.
So, does this mean of I were to take a 6-week trip to Europe my homeowners insurance would/could lapse? :shock:
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DarkHelmetII
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Re: Executor of Will - Selling House in Poor Condition

Post by DarkHelmetII » Tue Apr 16, 2019 10:00 am

All - thank you for the inputs, very helpful. Good pointers on checking if the homeowners insurance will still be good and some companies to remove junk or manage estate sales.

Another wrinkle ... my spouse has floated the idea of using "our" money to payoff the $55k remaining mortgage while we sort this out. My initial reaction was "no", on the premise that we do not want to conflate "our" money with that of the estate. Other points about my spouse being executor and to let her decide ... totally fair, but is it also fair to have an opinion on involving "our" cash in the estate, meanwhile otherwise keeping opinions to myself, or at least much more muted?

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Re: Executor of Will - Selling House in Poor Condition

Post by Ybsybs » Tue Apr 16, 2019 10:08 am

DarkHelmetII wrote:
Tue Apr 16, 2019 10:00 am
All - thank you for the inputs, very helpful. Good pointers on checking if the homeowners insurance will still be good and some companies to remove junk or manage estate sales.

Another wrinkle ... my spouse has floated the idea of using "our" money to payoff the $55k remaining mortgage while we sort this out. My initial reaction was "no", on the premise that we do not want to conflate "our" money with that of the estate. Other points about my spouse being executor and to let her decide ... totally fair, but is it also fair to have an opinion on involving "our" cash in the estate, meanwhile otherwise keeping opinions to myself, or at least much more muted?
Mixing your finances with the estate finances sounds bad. If you then sell later do you get reimbursed imputed rent? If you can't sell in a reasonable time, does having your money sunk into it influence you (or appear to the siblings to influence you) to reduce the list price faster than you should?

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Re: Executor of Will - Selling House in Poor Condition

Post by samsoes » Tue Apr 16, 2019 10:11 am

One Ping wrote:
Tue Apr 16, 2019 9:47 am
davewi wrote:
Tue Apr 16, 2019 9:32 am
One thing to remember is that the current homeowner's insurance probably lapses after the house is unoccupied for 30 days. You'll have to either find other coverage (difficult to get and expensive) or have the estate take on the risk of an uninsured house.
So, does this mean of I were to take a 6-week trip to Europe my homeowners insurance would/could lapse? :shock:
Yes, quite likely. Check your policy or call your agent.
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Re: Executor of Will - Selling House in Poor Condition

Post by JoeRetire » Tue Apr 16, 2019 10:17 am

DarkHelmetII wrote:
Tue Apr 16, 2019 10:00 am
Another wrinkle ... my spouse has floated the idea of using "our" money to payoff the $55k remaining mortgage while we sort this out.
What possible reason does she have for paying off the mortgage? And why would she want to use your money to do so?
My initial reaction was "no", on the premise that we do not want to conflate "our" money with that of the estate.
Agreed. That would be a big mistake.
Other points about my spouse being executor and to let her decide ... totally fair, but is it also fair to have an opinion on involving "our" cash in the estate, meanwhile otherwise keeping opinions to myself, or at least much more muted?
Yes.

You get to talk about "your" money. But she gets to decide about "her family's estate".

At least that's my opinion. No idea what your wife thinks. And her opinion is rather important here.

Is your spouse working with an estate attorney?
Last edited by JoeRetire on Tue Apr 16, 2019 10:26 am, edited 2 times in total.

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dm200
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Re: Executor of Will - Selling House in Poor Condition

Post by dm200 » Tue Apr 16, 2019 10:19 am

Ybsybs wrote:
Tue Apr 16, 2019 10:08 am
DarkHelmetII wrote:
Tue Apr 16, 2019 10:00 am
All - thank you for the inputs, very helpful. Good pointers on checking if the homeowners insurance will still be good and some companies to remove junk or manage estate sales.

Another wrinkle ... my spouse has floated the idea of using "our" money to payoff the $55k remaining mortgage while we sort this out. My initial reaction was "no", on the premise that we do not want to conflate "our" money with that of the estate. Other points about my spouse being executor and to let her decide ... totally fair, but is it also fair to have an opinion on involving "our" cash in the estate, meanwhile otherwise keeping opinions to myself, or at least much more muted?

Mixing your finances with the estate finances sounds bad. If you then sell later do you get reimbursed imputed rent? If you can't sell in a reasonable time, does having your money sunk into it influence you (or appear to the siblings to influence you) to reduce the list price faster than you should?
Unless there are some very, very favorable and unusual circumstances (none here I see), never spend your own funds (unless very trivial) for the estate. Many reasons, but one big one is that another heir will object. Then - you have an even bigger "mess"!!!!

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Re: Executor of Will - Selling House in Poor Condition

Post by NotWhoYouThink » Tue Apr 16, 2019 10:21 am

The executor will have to provide an accounting of the estate to the beneficiaries. Paying off the mortgage would make this enormously complicated.

Where is the money coming from to make the mortgage/tax/utility payments? Did the decedent have some liquid assets that are available to the executor? If so, that's the way to do it.

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Re: Executor of Will - Selling House in Poor Condition

Post by 8foot7 » Tue Apr 16, 2019 10:25 am

I can't imagine what could possibly be the point of paying off that mortgage using your own funds. That would be an administrative nightmare. It was difficult enough to properly document MIL's estate when only the funeral and locksmith expenses were advanced from our own funds (this was before we had a death certificate so we could not obtain access to bank accounts). I can't imagine why you would advance $55,000 to pay off a mortgage. Worst case what if the house doesn't sell for years? You've tied up your 55k in an estate potentially indefinitely.

Right now you continue to have the choice to walk away from the existing mortgage on the place. Advancing 55k to pay off that mortgage removes that option.

Horrible, horrendous idea.

I think you absolutely should speak up loud and clear - she gets to decide about the estate by herself but your/our money is a joint call, particularly of that magnitude.

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Re: Executor of Will - Selling House in Poor Condition

Post by RickBoglehead » Tue Apr 16, 2019 10:32 am

8foot7 wrote:
Tue Apr 16, 2019 10:25 am
I can't imagine what could possibly be the point of paying off that mortgage using your own funds. That would be an administrative nightmare. It was difficult enough to properly document MIL's estate when only the funeral and locksmith expenses were advanced from our own funds (this was before we had a death certificate so we could not obtain access to bank accounts). I can't imagine why you would advance $55,000 to pay off a mortgage. Worst case what if the house doesn't sell for years? You've tied up your 55k in an estate potentially indefinitely.

Right now you continue to have the choice to walk away from the existing mortgage on the place. Advancing 55k to pay off that mortgage removes that option.

Horrible, horrendous idea.

I think you absolutely should speak up loud and clear - she gets to decide about the estate by herself but your/our money is a joint call, particularly of that magnitude.
This ^^^ Awful idea.
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Re: Executor of Will - Selling House in Poor Condition

Post by Rob1 » Tue Apr 16, 2019 10:38 am

Sorry for your loss. I was in almost the exact situation. Here’s what we did:
  • Family members compromised. In our case, that meant that we sorted through everything, but quickly.
  • Family members took roles. Some helped sort through the house. Others supported the long list of tasks one goes through upon a family member death. Etc.
  • We did the absolute minimum amount of work on the house to get it listed. Reduced price and sold as is. There really wasn’t much upside in doing renovations. Downside is it took maybe a month longer to sell.
In the end, some were still not happy - particularly those that thought we should have sold things off slower, that we let things go at low prices.

In case you are interested, here’s how we tackled the house:
  • Local family donated clothes, food, and such.
  • Family flew into town. One week to prepare and hold massive garage sale, ending with donation runs and junk haul away service.
  • Took a break.
  • Family flew into town. One week to prepare and hold estate sale, ending with donation runs, junk haul away service, and other creative ways to get rid of everything. Cleaned house so it was ready to go in the market.
  • Along the way we of course kept the photos and family heirlooms, and split up items that family and friends were interested in.
It was a massive and exhausting task.

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Re: Executor of Will - Selling House in Poor Condition

Post by fposte » Tue Apr 16, 2019 10:40 am

OP, is the land the main value here? In some areas a house like that would be razed and something new built on the property. Yet another reason to get local realtor opinions before deciding what to do.

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Re: Executor of Will - Selling House in Poor Condition

Post by dm200 » Tue Apr 16, 2019 10:43 am

8foot7 wrote:
Tue Apr 16, 2019 10:25 am
I can't imagine what could possibly be the point of paying off that mortgage using your own funds. That would be an administrative nightmare. It was difficult enough to properly document MIL's estate when only the funeral and locksmith expenses were advanced from our own funds (this was before we had a death certificate so we could not obtain access to bank accounts). I can't imagine why you would advance $55,000 to pay off a mortgage. Worst case what if the house doesn't sell for years? You've tied up your 55k in an estate potentially indefinitely.

Right now you continue to have the choice to walk away from the existing mortgage on the place. Advancing 55k to pay off that mortgage removes that option.

Horrible, horrendous idea
.

I think you absolutely should speak up loud and clear - she gets to decide about the estate by herself but your/our money is a joint call, particularly of that magnitude.
Yes!

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Re: Executor of Will - Selling House in Poor Condition

Post by FBN2014 » Tue Apr 16, 2019 11:16 am

DarkHelmetII wrote:
Tue Apr 16, 2019 10:00 am
All - thank you for the inputs, very helpful. Good pointers on checking if the homeowners insurance will still be good and some companies to remove junk or manage estate sales.

Another wrinkle ... my spouse has floated the idea of using "our" money to payoff the $55k remaining mortgage while we sort this out. My initial reaction was "no", on the premise that we do not want to conflate "our" money with that of the estate. Other points about my spouse being executor and to let her decide ... totally fair, but is it also fair to have an opinion on involving "our" cash in the estate, meanwhile otherwise keeping opinions to myself, or at least much more muted?
No, no, no. She wants to do what she perceives as the right thing to do but it rarely works out that way. Your instincts are correct. Don't agree to use your funds. That is not the role of the executor. Sell ASAP.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

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Re: Executor of Will - Selling House in Poor Condition

Post by gtd98765 » Tue Apr 16, 2019 11:44 am

DarkHelmetII wrote:
Tue Apr 16, 2019 10:00 am
All - thank you for the inputs, very helpful. Good pointers on checking if the homeowners insurance will still be good and some companies to remove junk or manage estate sales.

Another wrinkle ... my spouse has floated the idea of using "our" money to payoff the $55k remaining mortgage while we sort this out. My initial reaction was "no", on the premise that we do not want to conflate "our" money with that of the estate. Other points about my spouse being executor and to let her decide ... totally fair, but is it also fair to have an opinion on involving "our" cash in the estate, meanwhile otherwise keeping opinions to myself, or at least much more muted?
Please ask her to speak with an estate attorney from the proper jurisdiction before she puts any significant funds into the place!

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Re: Executor of Will - Selling House in Poor Condition

Post by Murgatroyd » Tue Apr 16, 2019 11:53 am

I also had a similar situation with my mothers house. There were no family issues but the house was a major issue. We did consider bulldozing the house as a last result but were fortunate. There were structural safety issues and a big problem with the solar system which required significant $$. We fixed the structural problems for about $14,000. Then sold as is at a huge discount. At the end of the day there was some profit for the inheritors and we were lucky to find an individual who wanted the property.

Best of luck to you.

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Re: Executor of Will - Selling House in Poor Condition

Post by mariezzz » Tue Apr 16, 2019 12:14 pm

Spouse as executor decides how to handle estate, but where your/her money is concerned you decide together.

I'd suggest this: Deal with the big stuff - sell furniture, etc. Do this for a couple of weeks. She should be able to get through a lot what's there.

Where it comes to going through smaller belongings: your spouse could decide to rent a storage unit or put it your garage/basement while she goes through it. This will allow the house to be emptied, cleaned, & readied for sale (I'd suggest 'as is' but check into state laws on that), and then shown. In most markets, this is the best time of the year to be putting a house on the market, so that could be a factor.

Since the rest of the family was in favor of just dumping much of the belongings, I'd consider it 'dumped', and then she keeps the proceeds. Or, if you are afraid that might not be 'correct', she pays herself for the time spent going through everything, getting the house ready for sale, dealing with the estate in general. In this case, the proceeds of what is found in the stuff she goes through (the stuff the rest of the family want to just dump) can go back into the estate and split according to the estate's provisions.

If she rents a storage unit & no additional proceeds are gained after going through those items, you graciously concede that it's ok to have used your family's funds because this was important to her. It will only be a few hundred bucks, plus whatever it costs to get the items back to your area - rent a trailer or whatever it takes. Marital harmony is worth that.

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Re: Executor of Will - Selling House in Poor Condition

Post by bac » Tue Apr 16, 2019 12:24 pm

Re: Insurance.

If memory serves, I was told (by Liberty Mutual in New Jersey) that I had to leave furniture in the house in order to maintain insurance coverage. Totally vacant house would have been a problem.

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Re: Executor of Will - Selling House in Poor Condition

Post by kaudrey » Tue Apr 16, 2019 12:38 pm

Your spouse needs to read up on how to handle an estate.

Commingling funds is a TERRIBLE idea for so many reasons. The estate must be kept separate in all ways financial.

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Re: Executor of Will - Selling House in Poor Condition

Post by nodak » Tue Apr 16, 2019 12:49 pm

Look up auction companies in the area. They should be able to give you an idea if there is enough there to warrant selling. If there were comic books or other collectibles there are lots of people that hit up the auction circuit looking for those things. The auction company could also help with selling the house itself as well, many of them double as realtors. There is some legwork to be done to get stuff out of the house, and in boxes or lots, but once it is out the whole thing could be sold and off the family's hands in a matter of hours. The company will take their cut but will help out with clearing clutter and advertising to get people to the sale.

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Re: Executor of Will - Selling House in Poor Condition

Post by Determined » Tue Apr 16, 2019 1:31 pm

In my personal experience, clear it out and sell it as soon as possible. Do the minimum to make it presentable. I was the executor for my mother’s house. My brother and I both live a 2-3 plane trip away. He wanted to hold on to it for a while. I should have asserted my responsibility as executor, but emotion can be difficult. We kept it for a year because it was difficult to make the time to get there.

Insurance was a problem. Cost of the mortgage, taxes, insurance, and utilities added up. We took a u haul of things we wanted to sift through or otherwise hold on to. Those are still in storage

Not worth it.

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Re: Executor of Will - Selling House in Poor Condition

Post by NotWhoYouThink » Tue Apr 16, 2019 1:36 pm

Nothing in the world lasts as long as a temporary arrangement. Move heaven and earth to avoid putting anything in temporary storage, your garage, or anywhere else. Deal with it once and get rid of it. If that takes a month or two, fine. Longer than that and you're doing it wrong.

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Re: Executor of Will - Selling House in Poor Condition

Post by London » Tue Apr 16, 2019 1:58 pm

I’d call the number on one of these “We buy houses” and take whatever number they offer you. Be done with it and don’t invest time.

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Re: Executor of Will - Selling House in Poor Condition

Post by tadamsmar » Tue Apr 16, 2019 2:32 pm

Buford T Justice wrote:
Tue Apr 16, 2019 8:35 am
I think everyone needs to be paid for their time and effort.

Does this change the dynamic?
Depending on the state procedures, the executor may not be able to get an hourly rate. In my state, compensation is limited to 5% of the estate (not including real property that not sold). There are rules that limit the 5% other fees like realtor fees have to be paid, and the court has to approve the compensation (5% is not automatic).

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Re: Executor of Will - Selling House in Poor Condition

Post by FIREchief » Tue Apr 16, 2019 5:06 pm

DarkHelmetII wrote:
Tue Apr 16, 2019 5:49 am
The "Facts"
1) Spouse is executor for the will of a recently deceased family member

6) House in bad shape: a) incredibly cluttered, b) kitchen needs substantial work, c) bathroom needs substantial work, d) some of the floors feel like they are sloping, and e) some noticeable cracks in the wall (informal opinion from brother-in-law says this looks like a less worrisome form of settling)

7) Spouse has significant opportunity cost in that she works intense professional job, plus we are parents

8) Spouse and I live 2-hour flight away
Let's back up for a moment. You didn't share with us the specific relationship of the decedent with your spouse. Parent would be a special situation. Many others, not necessarily so much.

Did your spouse agree to serve as executor while the decedent was living? If so, did your spouse have an opportunity to ask questions and make requests prior to agreeing to serve?

It may be too late in your situation, but there may be an option to ask the courts to relieve your spouse of this role and move on to the next candidate (either as defined by the will or by state laws). I personally would never agree to serve as executor with this kind of mess, even if it meant that the courts appointed somebody "expensive" to complete the task. Life is too short.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Re: Executor of Will - Selling House in Poor Condition

Post by FIREchief » Tue Apr 16, 2019 5:33 pm

London wrote:
Tue Apr 16, 2019 1:58 pm
I’d call the number on one of these “We buy houses” and take whatever number they offer you. Be done with it and don’t invest time.
I would sooner just resign as executor. While I appreciate the simplicity in this suggestion, I would not be happy when one (or more) of the other heirs hired a lawyer to sue me for money that I failed to liquidate from the house's true value. For example, "we buy houses" gives the estate a check for $100K. Did I have it appraised? Oops. What if the appraisal came in at $120K? As executor, am I going to get sued for that other $20K plus legal fees? Not sure if this could happen but I sure wouldn't want to find out (the hard way).
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

FBN2014
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Re: Executor of Will - Selling House in Poor Condition

Post by FBN2014 » Tue Apr 16, 2019 6:09 pm

FIREchief wrote:
Tue Apr 16, 2019 5:06 pm
DarkHelmetII wrote:
Tue Apr 16, 2019 5:49 am
The "Facts"
1) Spouse is executor for the will of a recently deceased family member

6) House in bad shape: a) incredibly cluttered, b) kitchen needs substantial work, c) bathroom needs substantial work, d) some of the floors feel like they are sloping, and e) some noticeable cracks in the wall (informal opinion from brother-in-law says this looks like a less worrisome form of settling)

7) Spouse has significant opportunity cost in that she works intense professional job, plus we are parents

8) Spouse and I live 2-hour flight away
Let's back up for a moment. You didn't share with us the specific relationship of the decedent with your spouse. Parent would be a special situation. Many others, not necessarily so much.

Did your spouse agree to serve as executor while the decedent was living? If so, did your spouse have an opportunity to ask questions and make requests prior to agreeing to serve?

It may be too late in your situation, but there may be an option to ask the courts to relieve your spouse of this role and move on to the next candidate (either as defined by the will or by state laws). I personally would never agree to serve as executor with this kind of mess, even if it meant that the courts appointed somebody "expensive" to complete the task. Life is too short.
Good advice. A two hour flight means 1000+ miles away. The will usually has a successor executor if the appointed executor cannot serve. Take it from me your spouse doesn't need this headache.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

FBN2014
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Re: Executor of Will - Selling House in Poor Condition

Post by FBN2014 » Tue Apr 16, 2019 6:10 pm

FIREchief wrote:
Tue Apr 16, 2019 5:06 pm
DarkHelmetII wrote:
Tue Apr 16, 2019 5:49 am
The "Facts"
1) Spouse is executor for the will of a recently deceased family member

6) House in bad shape: a) incredibly cluttered, b) kitchen needs substantial work, c) bathroom needs substantial work, d) some of the floors feel like they are sloping, and e) some noticeable cracks in the wall (informal opinion from brother-in-law says this looks like a less worrisome form of settling)

7) Spouse has significant opportunity cost in that she works intense professional job, plus we are parents

8) Spouse and I live 2-hour flight away
Let's back up for a moment. You didn't share with us the specific relationship of the decedent with your spouse. Parent would be a special situation. Many others, not necessarily so much.

Did your spouse agree to serve as executor while the decedent was living? If so, did your spouse have an opportunity to ask questions and make requests prior to agreeing to serve?

It may be too late in your situation, but there may be an option to ask the courts to relieve your spouse of this role and move on to the next candidate (either as defined by the will or by state laws). I personally would never agree to serve as executor with this kind of mess, even if it meant that the courts appointed somebody "expensive" to complete the task. Life is too short.
Good advice. A two hour flight means 1000+ miles away. The will usually names a successor executor if the appointed executor cannot serve. If not hire an attorney and petition the probate court for relief. Take it from me your spouse doesn't need this headache.
Last edited by FBN2014 on Tue Apr 16, 2019 6:19 pm, edited 1 time in total.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

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DarkHelmetII
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Re: Executor of Will - Selling House in Poor Condition

Post by DarkHelmetII » Tue Apr 16, 2019 6:17 pm

FIREchief wrote:
Tue Apr 16, 2019 5:06 pm
DarkHelmetII wrote:
Tue Apr 16, 2019 5:49 am
The "Facts"
1) Spouse is executor for the will of a recently deceased family member

6) House in bad shape: a) incredibly cluttered, b) kitchen needs substantial work, c) bathroom needs substantial work, d) some of the floors feel like they are sloping, and e) some noticeable cracks in the wall (informal opinion from brother-in-law says this looks like a less worrisome form of settling)

7) Spouse has significant opportunity cost in that she works intense professional job, plus we are parents

8) Spouse and I live 2-hour flight away
Let's back up for a moment. You didn't share with us the specific relationship of the decedent with your spouse. Parent would be a special situation. Many others, not necessarily so much.

Did your spouse agree to serve as executor while the decedent was living? If so, did your spouse have an opportunity to ask questions and make requests prior to agreeing to serve?

It may be too late in your situation, but there may be an option to ask the courts to relieve your spouse of this role and move on to the next candidate (either as defined by the will or by state laws). I personally would never agree to serve as executor with this kind of mess, even if it meant that the courts appointed somebody "expensive" to complete the task. Life is too short.
Great questions and points FIREchief. I don't believe my spouse signed up for this (need to confirm but for purposes of this thread let's assume so). Relationship was parent's sibling and last living member of that side of the family (for the given generation and older). So not a parent but still a strong emotional attachment.

Also, what do you mean by the courts appointing somebody "expensive"? Are there professional executors?

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