Executor of Will - Selling House in Poor Condition

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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 6:21 pm

FBN2014 wrote:
Tue Apr 16, 2019 6:10 pm
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.
What does "petition the probate court for relief" mean in this context?

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

Post by quantAndHold » Tue Apr 16, 2019 6:28 pm

FIREchief wrote:
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).
Correct. The executor has a legal responsibility to get as much money as possible out of the estate. The “we buy ugly houses” people are not going to pay market value.

The carrying costs on this house (property tax, mortgage interest, insurance, etc) are really high compared to the equity in the house. I would give everyone who is interested a week to go through as much as possible. Then get 1-800-GOT-JUNK to haul off the rest. Hire a crew to spend a week cleaning and painting, and sell it as is for whatever price it will go for. The longer you hold the house, the less it’s going to net.

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

Post by FBN2014 » Tue Apr 16, 2019 6:40 pm

DarkHelmetII wrote:
Tue Apr 16, 2019 6:21 pm
FBN2014 wrote:
Tue Apr 16, 2019 6:10 pm
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.
What does "petition the probate court for relief" mean in this context?
Ask the probate court judge to appoint another executor due to it being a hardship for your wife due to her job and the fact that she lives a great distance from the house and due to its condition would require lots of attention in order to sell at a good price.
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FIREchief
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Re: Executor of Will - Selling House in Poor Condition

Post by FIREchief » Tue Apr 16, 2019 8:49 pm

DarkHelmetII wrote:
Tue Apr 16, 2019 6:17 pm
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.
I am not a lawyer (please see my signature) and I know just enough about serving as an executor to run away as fast as I can if it ever comes up (except for my own spouse or children). Even if a person agrees to be nominated as personal representative in another person's will, I don't believe there is any legal obligation at that point. That said, if so nominated and that person petitions the court for letters of appointment, I believe they are at that point taking on a legal responsibility. It may vary by state, but once appointed I don't believe a person can simply resign without the court's approval. Hopefully somebody who is a lawyer or understands this better will weigh in. It doesn't sound like there is a truly compelling reason for your spouse to continue in this role other than perhaps an obligation to "do the right thing." Of course, I don't know the situation.
Also, what do you mean by the courts appointing somebody "expensive"? Are there professional executors?
Again, I don't really know much about this. I believe that in more populated areas, a county will have a public administrator who at some point is obligated to act as personal representative for decedents for whom no family member (or other) is available and willing to act as executor for the estate. I've only reviewed the actual state law for one state, and there is a long line of folks who have up to x number of days to petition the court for letters of appointment. I'm also aware of one rural county for which there is no public administrator. I'm guessing, and only guessing, that in such situations that the court will appoint somebody to administer the estate. I don't know if this is just some local lawyer (or other "friend of the court") but if I were an heir in that situation my only concern, and likely a very minor one, was that such a court appointed professional might cost more / charge more than a family member might.

Lot's of grey areas and unknowns, especially when state laws vary and even specific county's may operate differently.
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FIREchief
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Re: Executor of Will - Selling House in Poor Condition

Post by FIREchief » Tue Apr 16, 2019 8:50 pm

FBN2014 wrote:
Tue Apr 16, 2019 6:40 pm
DarkHelmetII wrote:
Tue Apr 16, 2019 6:21 pm
FBN2014 wrote:
Tue Apr 16, 2019 6:10 pm
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.
What does "petition the probate court for relief" mean in this context?
Ask the probate court judge to appoint another executor due to it being a hardship for your wife due to her job and the fact that she lives a great distance from the house and due to its condition would require lots of attention in order to sell at a good price.
Thanks FBN2014. I think you've stated this much more clearly than I did. :P
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michaeljc70
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Re: Executor of Will - Selling House in Poor Condition

Post by michaeljc70 » Wed Apr 17, 2019 9:28 am

I would try and get someone to de-clutter the house and then sell it as is. Being far away and trying to manage getting quotes to get work done and ensuring the work is done properly will be too difficult. Maybe you can fly there for a weekend and de-clutter it and meet real estate agents if you cannot get someone closer to do it.

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

Post by Tlmlb » Thu Apr 18, 2019 8:56 am

Went through this about 2 years ago...
1. Interview real estate agents experienced in the area and with selling houses held by an estate or trust. The right one will have a conbination of business savvy and a "rolodex" full of referrals of estate sales people, handymen, painters, cleaners, gardeners, other contractors and estate sales people. They should also have a little design experience so they can determine what repairs will make the house appeal to a buyer's "vision".
2. Go through the house and take the valuables and inventory them with FMV
3. Anyone who wishes to claim an item knows that is a distribution of assets and may reduce the relative amount of cash they receive as a portion of the total estate. Things become less sentimentally valuable with this proviso.
4. Anything left is for the Estate Sales company you will hire to sell. They will price everything out and hold the sale. Their commission will be significant but they should also haul away the leftovers. Disreputable folks may cause some things to be "left unsold" so you need to keep an eye on it. Look for decent referrals from friends or the real estate agent.
5. House is now empty. Meet with realtor to figure how much lipstick to put on the property. Determine sales price. The realtor can help with scheduling, the more they do the better.
6. Show it and evaluate offers. Be prepared for low ball flippers. Issues like mechanical systems and extensive repairs can be handled through negotiated buyer credits through escrow. Here is where the realtor's list of contractors will be helpful, (ie "what's the going rate for a replumb etc.). This shifts responsibility of the repair to the buyer...you won't be responsible down the line for problems/issues. To deal with flippers, have buyers submit a letter why they want to buy the house. This will help in evaluating and countering the initial offers.
7. If it doesn't sell within 4-6 weeks meet with realtor and determine why. In my case, people did not object to the price per square foot but the house had an awkward layout and potential buyers could not imagine how furniture would be laid out. We overcame this by professionally staging the house with strategic furniture placement. After staging, we had an acceptable offer within a week.

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

Post by DarkHelmetII » Thu Apr 18, 2019 6:02 pm

Tlmlb wrote:
Thu Apr 18, 2019 8:56 am
Went through this about 2 years ago...
1. Interview real estate agents experienced in the area and with selling houses held by an estate or trust. The right one will have a conbination of business savvy and a "rolodex" full of referrals of estate sales people, handymen, painters, cleaners, gardeners, other contractors and estate sales people. They should also have a little design experience so they can determine what repairs will make the house appeal to a buyer's "vision".
2. Go through the house and take the valuables and inventory them with FMV
3. Anyone who wishes to claim an item knows that is a distribution of assets and may reduce the relative amount of cash they receive as a portion of the total estate. Things become less sentimentally valuable with this proviso.
4. Anything left is for the Estate Sales company you will hire to sell. They will price everything out and hold the sale. Their commission will be significant but they should also haul away the leftovers. Disreputable folks may cause some things to be "left unsold" so you need to keep an eye on it. Look for decent referrals from friends or the real estate agent.
5. House is now empty. Meet with realtor to figure how much lipstick to put on the property. Determine sales price. The realtor can help with scheduling, the more they do the better.
6. Show it and evaluate offers. Be prepared for low ball flippers. Issues like mechanical systems and extensive repairs can be handled through negotiated buyer credits through escrow. Here is where the realtor's list of contractors will be helpful, (ie "what's the going rate for a replumb etc.). This shifts responsibility of the repair to the buyer...you won't be responsible down the line for problems/issues. To deal with flippers, have buyers submit a letter why they want to buy the house. This will help in evaluating and countering the initial offers.
7. If it doesn't sell within 4-6 weeks meet with realtor and determine why. In my case, people did not object to the price per square foot but the house had an awkward layout and potential buyers could not imagine how furniture would be laid out. We overcame this by professionally staging the house with strategic furniture placement. After staging, we had an acceptable offer within a week.
Great insights, thanks. How do we identify a reputable estate sale company? This is a topic I know nothing about.

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

Post by Watty » Fri Apr 19, 2019 1:24 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:
It depends on your state and insuance company. It would be best to ask your insuance company or read your policy. There have been prior threads on this that you may be able to find and it seems to vary widely. Some insuance companies may an inexpensive rider for a vacant house. This is not uncommon though since people that RV or have two homes will often have long periods when the house is not occupied so finding a policy is not all that hard in that situation but you may need to shop around.

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

Post by FIREchief » Fri Apr 19, 2019 1:35 am

Watty wrote:
Fri Apr 19, 2019 1:24 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:
It depends on your state and insuance company. It would be best to ask your insuance company or read your policy. There have been prior threads on this that you may be able to find and it seems to vary widely. Some insuance companies may an inexpensive rider for a vacant house. This is not uncommon though since people that RV or have two homes will often have long periods when the house is not occupied so finding a policy is not all that hard in that situation but you may need to shop around.
One major insurance company will allow you to retain your policy, but it won't cover theft or vandalism after 30 days. If you don't accept that, you can replace it with a vacant house policy which provides less insurance for higher cost. Theft and vandalism coverage will be an upper, as will water damage. It doesn't seem "fair," but insurance companies have facts and data to backup everything, so it is likely what an owner of a vacant home should expect.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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

Post by boomer_techie » Fri Apr 19, 2019 1:45 am

DarkHelmetII wrote:
Tue Apr 16, 2019 5:49 am
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)

1) I see two options: a) sell house 100% as-is, ...
You need to find your area's version of this Colorado house flipper: https://www.youtube.com/user/InvestFourMore/videos

He buys houses as-is, with whatever contents are present, with no inspection, and a quick closing. He buys both direct and via the MLS system. With the latter, the seller will pay commissions, and because the flipper is also a real estate agent representing himself, he'll get the buyer's agent's commission.

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

Post by NotWhoYouThink » Fri Apr 19, 2019 6:55 am

Great insights, thanks. How do we identify a reputable estate sale company? This is a topic I know nothing about.
Check out estatesales.net and the zip code of the house in question.

If no one that does business in the area will bid on your piles of stuff, that's information that tells you to call 1-800-GOT-JUNK and pay to have it hauled off. If someone does bid, keep in mind that this is poorly regulated industry and there is likely to be some cherry-picking and shadiness, but if they are paying you instead of you doing everything yourself, with all the time and extra carrying costs that entails, you'll come out ahead.

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Re: Executor of Will - Selling House in Poor Condition

Post by London » Fri Apr 19, 2019 8:53 am

FIREchief wrote:
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).
No one in my family (that would be an heir), would care to take the time to sort out a mess. No one would sue. While I understand your point of view, if you have family that would pursue litigation against family members over a reasonably small amount of money, you have larger problems than unloading the house. In that situation, I would resign as executor regardless of the value and complexity.

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Re: Executor of Will - Selling House in Poor Condition

Post by JGoneRiding » Fri Apr 19, 2019 9:14 am

I am a recently appointed executor too. On top of a 4 hour drive I am 8 months preg. Other than what I can very easily contract doe low cost (flooring) I told all the heirs we were NOT fixing the house.

My house is in decent if not perfect condition in a hotish market. Could we get more with upgrades? Sure but no one was jumping at the bit to front the money and no way was I messing with it.

So my advice, sell as is, sell everything as is. We are going to have an estate sell. When I told my mom the percentage they take she was shocked. When I asked if she wanted to conduct the sell no. Its just not worth it to any one person to put in any extra effort!

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

Post by FIREchief » Fri Apr 19, 2019 1:03 pm

London wrote:
Fri Apr 19, 2019 8:53 am
FIREchief wrote:
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).
No one would sue.
Nobody knows that with 100% certainty. My comments were a hypothetical intended to help others think about serving as executor of an estate. That said, please remember that there are many estate situations and they change over time. Nobody in our country can ever be assured that "no one will sue." Everybody can sue anybody, and funny stuff can happen to relationships when a parent passes away and money is on the table. Sure, you can be in a happy traditional family with a couple of siblings who all get along. Mom passes away and one of the siblings executes the estate. Probably a few questions that come up but in the end, nobody sues. Great! Fast forward ten years and one of the siblings has passed away, so their take passes to some nieces and nephews who are cash strapped and have no real relationship with the executor. Things can suddenly start to get fuzzy.
While I understand your point of view, if you have family that would pursue litigation against family members over a reasonably small amount of money, you have larger problems than unloading the house.
What's a "reasonably small amount of money?" In the example I originally gave, it was $20K. To a lot of Bogleheads, that meets your definition. To 80% of our country's population, maybe not. In the second example I just gave (the nieces and nephews), I don't believe your statement holds true. If I were executor (which I never will be), unloading the house would be my only large problem. The fact that there might be extended family heirs that I don't really have a relationship with who might sue me is just noise - unless I step in it wrt serving as executor.
In that situation, I would resign as executor regardless of the value and complexity.
It looks like we're in 100% agreement on this, as my original post opened with "I would sooner just resign as executor." :beer
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FIREchief
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Re: Executor of Will - Selling House in Poor Condition

Post by FIREchief » Fri Apr 19, 2019 1:06 pm

London wrote:
Fri Apr 19, 2019 8:53 am
No one in my family (that would be an heir), would care to take the time to sort out a mess.
That's the beauty of not being executor. Heirs who are not the executor have no responsibility (legal or otherwise) to sort out the mess. This is entirely the legal duty of the executor. They have to inventory, value, liquidate, distribute, etc. and their actions are ultimately subject to the scrutiny of the courts and heirs. Please see my signature and I'll greatly welcome any clarifications or confirmations from those who are legal professionals. :D
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Re: Executor of Will - Selling House in Poor Condition

Post by London » Fri Apr 19, 2019 1:24 pm

quantAndHold wrote:
Tue Apr 16, 2019 6:28 pm
FIREchief wrote:
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).
Correct. The executor has a legal responsibility to get as much money as possible out of the estate. The “we buy ugly houses” people are not going to pay market value.

The carrying costs on this house (property tax, mortgage interest, insurance, etc) are really high compared to the equity in the house. I would give everyone who is interested a week to go through as much as possible. Then get 1-800-GOT-JUNK to haul off the rest. Hire a crew to spend a week cleaning and painting, and sell it as is for whatever price it will go for. The longer you hold the house, the less it’s going to net.
I disagree. The executor has the legal responsibility of acting in the best interest of all parties with a claim to the estate. When the parties have no interest in maximizing financial value, but rather have an interest in time value, the executor can and should act in that manner.

Plenty of people divide assets without interest in maximizing financial value.

In this example, where there is a mortgage involved, the executor must take the financial interests of the bank into account. I.e, can’t sell it for a dollar. In the case where there are two heirs and neither cares, the executor could in fact sell it at a discount for convenience. There may be tax implications, but that’s outside my expertise.

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

Post by FIREchief » Fri Apr 19, 2019 1:36 pm

This is a good discussion. It comes up occasionally on the forum, but not often enough.
London wrote:
Fri Apr 19, 2019 1:24 pm
The executor has the legal responsibility of acting in the best interest of all parties with a claim to the estate. When the parties have no interest in maximizing financial value, but rather have an interest in time value, the executor can and should act in that manner.
Just to clarify, are you referring to the executor's time or the heirs' time?
In the case where there are two heirs and neither cares, the executor could in fact sell it at a discount for convenience.
How would you envision the executor establishing the fact that "neither cares?" Would the executor need something in writing from each heir? Would it require a notarized signature?
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 JGoneRiding » Fri Apr 19, 2019 1:46 pm

F150HD wrote:
Tue Apr 16, 2019 7:19 am
IMO, start w/ a dumpster and remove all 'clutter'. Then reevaluate.
No don't! The estate sell people will go through it! Yes as stated they take half but they can take care of everything! They told us to throw nothing but actual trash. Even shampoo stuff people will take.

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Re: Executor of Will - Selling House in Poor Condition

Post by ncbill » Fri Apr 19, 2019 4:05 pm

Yeah, in the OP's situation I'd get rid of it ASAP.

It makes a lot of difference if you're in-town, have the time to work on it, & don't pay such crazy taxes...since I'm in the same town I took several months to go through a deceased relative's home, taking the time necessary to sell its contents in order to maximize proceeds.

Even though their home had a lot of deferred maintenance I was able to do most of it myself (e.g., repaint the interior, they were a heavy smoker, brown walls/ceilings don't attract buyers)

Didn't repaint of the outside even though it could use it...putting it on the market in the next few weeks.

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Re: Executor of Will - Selling House in Poor Condition

Post by HereToLearn » Fri Apr 19, 2019 4:42 pm

I do not know if this happens in every state, but almost as soon as I was named the executor (Letters Testamentary issued), I started receiving phone calls and texts to my cell phone with offers to buy the home. My home phone was the one listed in the probate filing, so I was taken aback when the first contacts arrived on my cell phone. Many letters from parties interested in purchasing the home arrived in the mail, and continue to even now after I have closed on the sale.

Best of luck to anyone going through this. My process was really quite easy, but it was still a great deal of work, and emptying out the house took MANY man hours.

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Re: Executor of Will - Selling House in Poor Condition

Post by F150HD » Fri Apr 19, 2019 5:18 pm

JGoneRiding wrote:
Fri Apr 19, 2019 1:46 pm
F150HD wrote:
Tue Apr 16, 2019 7:19 am
IMO, start w/ a dumpster and remove all 'clutter'. Then reevaluate.
No don't! The estate sell people will go through it! Yes as stated they take half but they can take care of everything! They told us to throw nothing but actual trash. Even shampoo stuff people will take.
well, ya have to go thru it as you may need to find financial statements, records etc. to close the estate. Prob easier to die broke I guess. Depends on 'clutter' as well. One mans trash.....is another mans aroma. :wink:
Long is the way and hard, that out of Hell leads up to light.

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

Post by FIREchief » Fri Apr 19, 2019 7:58 pm

F150HD wrote:
Fri Apr 19, 2019 5:18 pm
well, ya have to go thru it as you may need to find financial statements, records etc. to close the estate. Prob easier to die broke I guess. Depends on 'clutter' as well. One mans trash.....is another mans aroma. :wink:
This is avoidable. A) never accept an appointment as executor unless B) it is a REALLY close person and they are willing to show you everything, answer all your questions and work with you prior to their demise and your accepting of the "honor." Otherwise, you're walking into a dark alley blindfolded without having any idea what ugliness you are about to encounter.
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gasdoc
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Re: Executor of Will - Selling House in Poor Condition

Post by gasdoc » Sat Apr 20, 2019 7:11 am

This is what we did, in coordination with local agent:

1) Salvaton Army came to house to collect anything they wanted (large furniture).
2) Moving company loaded everything remaining from the house, and took to landfill.
3) Cleaners came and wiped down walls, did good deep cleaning.
4) Brother-in-law and I did a few days work on small fixes (raked small front lawn, cleaned difficult to disassemble windows, clean some gutters, minor pressure washing, clean inside of oven, etc.).
5) Home Depot replaced carpet with middle grade neutral color carpet throughout house.
6) Second walk through with realtor.
7) Photographer referred by realtor took listing photo's and listed later that day (Friday).

I took one week of vacation to fly to the house in a different state, and the entire job above was completed during that week (just ended. The house is being shown this weekend. Wish me luck.

gasdoc

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Re: Executor of Will - Selling House in Poor Condition

Post by JGoneRiding » Sat Apr 20, 2019 9:30 am

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?
I want to point out that depending on the state that may be legally difficult to do. This is why the as quickly as possible as is approach will generally save the estate the most funds.

In the estate I am dealing with it is clearly solvent but not liquid! There arent funds to pay the mortgage, taxes, insurance. I have to sell the house asap or risk other losses. I can pay for repairs out of house proceeds but I can't pay myself for my time so it isn't worth extra on my part nor on the part of any one heir.

We are dealing with tragedy on top of death and still people are being reasonable about needs

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

Post by JGoneRiding » Sat Apr 20, 2019 3:48 pm

FIREchief wrote:
Fri Apr 19, 2019 1:36 pm
This is a good discussion. It comes up occasionally on the forum, but not often enough.
London wrote:
Fri Apr 19, 2019 1:24 pm
The executor has the legal responsibility of acting in the best interest of all parties with a claim to the estate. When the parties have no interest in maximizing financial value, but rather have an interest in time value, the executor can and should act in that manner.
Just to clarify, are you referring to the executor's time or the heirs' time?
In the case where there are two heirs and neither cares, the executor could in fact sell it at a discount for convenience.
How would you envision the executor establishing the fact that "neither cares?" Would the executor need something in writing from each heir? Would it require a notarized signature?
I can tell you how I have done it so far. I am using group email in order to get 6 I don't care that sounds fine documented responses.

An executor has a responsibility to protect assets reasonably there is no responsibility to get max dollar as long as they use a 3rd party selling process. The courts understand this. Heirs might be more confused.

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

Post by NotWhoYouThink » Sat Apr 20, 2019 5:40 pm

From the little I've heard from talking to friends and family about settling estates, I'd guess that most estates are settled sloppily and inefficiently because most of the work is done by people that haven't done it before and don't have the skills or interest to do a lot of research. Many of them are settled by people who are also selfish and not completely honest. Humans

Also, most beneficiaries greatly underestimate the work the executor has to do, and don't really feel comfortable that they haven't been taken for a ride. But they accept the results because they don't want to be the one in charge.

The level of effort described above by JGoneRiding and gasdoc are well above and beyond what I've seen IRL.

My FIL's estate was settled, for instance, with zero information provided from the executor to the other beneficiaries. The total accounting was that he told them the number he divided by 3 in order to determine how much every one got. Not what the house sold for, or how much his wife's nephew was paid to fix it up, or what the tax/insurance/maintenance costs were, or what was spent on the funeral costs or what was left in the checking account or what assets were sold in the trust account. Just the final total, divided by 3. (Free of trust, because he didn't read FIL's trust and find out it was supposed to be divided into 3 trusts.) And no one asked for more, because they wouldn't have gotten anything that made sense and it wasn't enough to blow up the family relationships over. I even ignored the obvious problems with the 1041 because there was never going to be enough information to get it right, and the CPA didn't work for me she worked for the executor.

Others on BH have described similar situations, and friends and family have told me stories of poor organization and communication. I really commend the people on this thread who have worked for no pay to get it right. I consider it a community/family service to do the job well, and think that in most cases it would be a waste of money to pay an unrelated party to do it for people on this board who have the intelligence and organizational skills to do it right, or at least pretty darn close to right. For a big complicated estate the cost to pay an expert to get it right might be less than the waste and slop of getting it wrong, but for small estates it just needs to get done somehow.

That said, if I were dealing with an antagonistic or litigious beneficiary, I'd back out and let a pro handle it.

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

Post by FIREchief » Sun Apr 21, 2019 12:10 am

JGoneRiding wrote:
Sat Apr 20, 2019 3:48 pm
FIREchief wrote:
Fri Apr 19, 2019 1:36 pm
This is a good discussion. It comes up occasionally on the forum, but not often enough.
London wrote:
Fri Apr 19, 2019 1:24 pm
The executor has the legal responsibility of acting in the best interest of all parties with a claim to the estate. When the parties have no interest in maximizing financial value, but rather have an interest in time value, the executor can and should act in that manner.
Just to clarify, are you referring to the executor's time or the heirs' time?
In the case where there are two heirs and neither cares, the executor could in fact sell it at a discount for convenience.
How would you envision the executor establishing the fact that "neither cares?" Would the executor need something in writing from each heir? Would it require a notarized signature?
I can tell you how I have done it so far. I am using group email in order to get 6 I don't care that sounds fine documented responses.

An executor has a responsibility to protect assets reasonably there is no responsibility to get max dollar as long as they use a 3rd party selling process. The courts understand this. Heirs might be more confused.
"6 I don't care that sounds fine" responses. Sweet!! :beer
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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FIREchief
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Re: Executor of Will - Selling House in Poor Condition

Post by FIREchief » Sun Apr 21, 2019 12:14 am

NotWhoYouThink wrote:
Sat Apr 20, 2019 5:40 pm
From the little I've heard from talking to friends and family about settling estates, I'd guess that most estates are settled sloppily and inefficiently because most of the work is done by people that haven't done it before and don't have the skills or interest to do a lot of research. Many of them are settled by people who are also selfish and not completely honest. Humans

Also, most beneficiaries greatly underestimate the work the executor has to do, and don't really feel comfortable that they haven't been taken for a ride. But they accept the results because they don't want to be the one in charge.

The level of effort described above by JGoneRiding and gasdoc are well above and beyond what I've seen IRL.

My FIL's estate was settled, for instance, with zero information provided from the executor to the other beneficiaries. The total accounting was that he told them the number he divided by 3 in order to determine how much every one got. Not what the house sold for, or how much his wife's nephew was paid to fix it up, or what the tax/insurance/maintenance costs were, or what was spent on the funeral costs or what was left in the checking account or what assets were sold in the trust account. Just the final total, divided by 3. (Free of trust, because he didn't read FIL's trust and find out it was supposed to be divided into 3 trusts.) And no one asked for more, because they wouldn't have gotten anything that made sense and it wasn't enough to blow up the family relationships over. I even ignored the obvious problems with the 1041 because there was never going to be enough information to get it right, and the CPA didn't work for me she worked for the executor.

Others on BH have described similar situations, and friends and family have told me stories of poor organization and communication. I really commend the people on this thread who have worked for no pay to get it right. I consider it a community/family service to do the job well, and think that in most cases it would be a waste of money to pay an unrelated party to do it for people on this board who have the intelligence and organizational skills to do it right, or at least pretty darn close to right. For a big complicated estate the cost to pay an expert to get it right might be less than the waste and slop of getting it wrong, but for small estates it just needs to get done somehow.

That said, if I were dealing with an antagonistic or litigious beneficiary, I'd back out and let a pro handle it.
Thanks for posting this. In the single situation I have experience with, state law required a final accounting unless the heirs all waived their right to such. I refused, and I am glad I did.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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

Post by FoolStreet » Sun Apr 21, 2019 12:40 am

DarkHelmetII wrote:
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
In general, I would recommend finding a realtor who can identify a good contractor who you can pay remotely. Basically, give all operational decision making to your realtor and just pay the contractor. List on MLS like normal. Don’t take pre offers from neighbors.

That is the text book advice and only works if you have a good(hungry) realtor. But no one will complain if you want to unload some other way.

Whatever you do, don’t let the high-powered spouse get burdened by the minutiae for practical and perhaps emotional reasons. Good luck.

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

Post by momvesting » Sun Apr 21, 2019 1:27 am

Based on the initial walk thru and declutter, make an honest estimate of how much cash and valuable property might be contained within the house. If it is significant enough to justify the cost, rent a POD, toss everything inside, and have it shipped to your home or another nearby convenient location so your wife can spend time sifting through it if that is what she wants to do. Then get rid of the house ASAP, those taxes are eating your profit by the day!!

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

Post by NotWhoYouThink » Sun Apr 21, 2019 12:50 pm

FIREchief wrote:
Sun Apr 21, 2019 12:14 am
[

Thanks for posting this. In the single situation I have experience with, state law required a final accounting unless the heirs all waived their right to such. I refused, and I am glad I did.
Our state requires a minimum level of accounting even if the heirs sign the waiver, which they did in this case. The executor did not come close to meeting the minimum, probably because he was not aware of it, on top of the fact that he kept no records. I suspect he did an above average job anyway, but I only know that because I had detailed insight into FIL's finances before his death, and know what assets were available. He was lazy and sloppy but not dishonest, so there was that.

momvesting wrote:
Sun Apr 21, 2019 1:27 am
Based on the initial walk thru and declutter, make an honest estimate of how much cash and valuable property might be contained within the house. If it is significant enough to justify the cost, rent a POD, toss everything inside, and have it shipped to your home or another nearby convenient location so your wife can spend time sifting through it if that is what she wants to do. Then get rid of the house ASAP, those taxes are eating your profit by the day!!
OP said the executor has a high earning job, so her time is valuable. Can't imagine it would be worth it to sort through the debris of someone else's life for long. And you can't close the estate until that job is done anyway, might as well get on with things and sort before it leaves the house and not set it up to drag out.

Dottie57
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Re: Executor of Will - Selling House in Poor Condition

Post by Dottie57 » Sun Apr 21, 2019 1:25 pm

DarkHelmetII wrote:
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?
Lawyers can be appointed executors. They are paid from estate proceeds. They will most likely hire other professionals for various tasks. Court has to ok any bills from executor.

Btw, OP’s wife can also put in a bill for expenses including time. I wouldn’t recommend a high priced hotel or first class tickets to location of house. Receipts for cost need to be saved. Time recorded as you go and an accounting of what was done.

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

Post by FIREchief » Sun Apr 21, 2019 9:23 pm

I recently completed a self-declutter and it was absolutely hard work. I'm not sure if it would be harder or easier for an estate of a loved one. I have no intention of ever finding out. Just let somebody else do it.....
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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

Post by Lee_WSP » Sun Apr 21, 2019 10:06 pm

An executor is a fiduciary. The house is not the executor's to do with as he/she wills. He/she needs to consult with a probate attorney about the feasibility/wisdom of this course of action (spend money to possibly make money).

As far as putting your/his/her own time into cleaning up the place, it's a good idea, but you're kind of working for the other heirs for free too.

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