From the many calls we receive each week, an executor, administrator, and/or successor trustee, also referred to as an estate representative or representative of an estate, does not understand the importance of hiring a trained and experienced Probate Real Estate Agent.
What Questions to Ask a Probate Real Estate Agent?
In probate and trust estates, most people don’t know what questions to ask. This is not an issue if they hire an experienced probate realtor, often referred to as a Certified Probate Real Estate Specialist, or CPRES, who does know what questions to ask!
Beware of self-appointed “probate agents” that do not have training and experience. There are far too many self-appointed gurus and experts. Do your homework and vet them out! Ask questions. Ask for credentials and certifications. Ask for testimonials or past client recommendations.
Years ago, one executor asked all interested agents to provide a copy of their credentials with their proposal. Of the 13 agents that claimed to be probate specialists, only 6 agents did. Of the six, the executor narrowed the candidates down to three. We were selected to list the home. When we asked the executor why the response was: (1) overall professionalism (2) knowledge in the response to the request for proposal and (3) local agent. In all the years of listing probate homes, this was the first and only executor, who was an executive in Santa Clara County, that employed a hiring and interview process. Hats off to that person!
We know there is no humor in probate or administering a trust estate. Both are serious business.
The signs are often not as obvious as some of the funny stories comedian Jeff Foxworthy tells about questions people ask. If you are not familiar with Jeff Foxworthy, he tells stories about the “stupid” questions people ask followed by: Here’s your sign. For example, a driver gets their truck stuck under an overpass. It is clear as day the truck is stuck.
A person stops and asks: Did you get your truck stuck?
Foxworthy’s response as he points to the truck … Here’s your sign.
98% of our probate and successor trustee clients are in their role for the very first time and freely admit, “I do not know what I am doing.”
As far as probate real estate services are concerned, we do!
There are no “stupid” questions as far as we are concerned. It is the questions we do not ask that can come back and bite us in the backside. We never Ass-u-me anything.
Probate Real Estate Agent | Synopsis of Calls Received
The following is a synopsis of calls we received in one week that illustrate real estate agents’ lack of knowledge and training in general and specifically in probate. The synopsis of the calls also illustrates what may be perceived as ignorance, or not knowing, on behalf of an executor or estate representative. These calls relate to matters in Santa Clara County. For privacy and security reasons names and property addresses are omitted. We provide enough information for illustrative purposes only.
Call # 1: This person found us through their Internet search. It is not uncommon for people to just call without realizing the areas we serve, they need help and just call. The person was from Southern California looking for an attorney to modify an irrevocable trust under probate code 15404. This request for help is not only out of service area it is legal in nature. We are not licensed to practice law. We cannot and do not provide legal advice. We advised the person it is best to hire a local trust attorney familiar with the local court and local court rules. We refer people to attorneys in Santa Clara County and surrounding bay area locations however we do not have trusted relationships with attorneys outside of our service area.
Call #2: A week rarely goes by without a call, email, or text message from someone looking for off-market opportunities. Frequently the caller ID shows a private, unknown, or otherwise blocked number. Why do we receive so many of these calls, because the perception is a probate realtor is more likely to have off-market opportunities.
The calls typically go something like this:
I am actually giving you a call to see if you have any off-market properties available. We are looking for something that is probably kind of a fixer, and it has to be off-market.
Anything under $3M in Santa Clara County. If you have something that might be a fit, we would be happy to have you represent us as an agent and also list it for us once we are finished with the project on the backend.
If you have something that might match this description, please give me a call I would love to chat.
My phone number is [phone intentionally omitted].
Let’s boil that down. “we would be happy to have you represent us as an agent and also list it for us once we are finished with the project on the backend.”
Cha-ching. Cha-Ching for the probate realtor or any realtor for that matter. If a seller makes an informed decision, eyes wide open, and the seller does not have any issues with the probate realtor selling the estate home off-market, then we certainly have no issues with it.
The potentially multi-million dollar question is: Did the seller have all the information and fully understand how off-market real estate sales work?
We know from experience, that offers to represent the buyer on an off-market property when we also represent the seller, come with the expectation the home will be sold for less than market value. The “hook” is the promise to list the home again when the upgrading and renovations are complete.
The true win here is with:
- The buyer because they purchased below market and did not have to compete with other buyers willing to pay more.
- The agent potentially doubles their income by representing both the buyer and the seller.
- The agent again for the opportunity to list the home again when renovations are complete. This presumes the agent was wise enough to engage an attorney to “paper the offer” to hold the buyer accountable to the offer. You see if it is not in writing good luck enforcing it.
Who potentially is the Bigger Loser? The seller. We say potentially we do not have all the facts and information on all off-market real estate sales.
We did represent one client who initially planned to list the home on the Multiple Listing Service. After a long-drawn-out eviction process involving a sheriff eviction, they did not want to deal with the massive hoarding situation, trashing out, cleaning up, and asked if we could sell it just as it is.
As you can well imagine, finding a buyer was not challenging. The buyer was delighted with the opportunity. The seller was more than happy with the sale price we negotiated and how we managed the entire process.
We believe unless there are special circumstances with a seller, it is always best to market a home on the Multiple Listing Sevice and let buyers compete. Competition drives the price up and the sellers are assured of the highest and best price. Probate real estate sales are no exception. Unless the sale is off-market we believe screaming hot deals buying a probate home in Santa Clara County is a myth!
Sibling of the Executor of Their Mother’s Estate
Call # 3: We received a call from a sibling of the executor of their mother’s estate. The sibling was concerned that the brother hired a friend to sell the family home. The caller wanted to hire us. We explained that they need the authority to hire a real estate agent to list a home in probate. That authority comes from the court in the form of Letters of Administration if the person died without a will or Letters Testamentary if they died with a will.
The person explained that as far as they knew, the petition for probate had not yet been filed. Our online search did not show a petition had been filed. We know there is a backlog in filings with the Santa Clara County Probate Court. It could be the papers were submitted and not yet processed. It can take up to 30 days or more from when the documents are e-filed, processed, and a hearing date set.
The caller went on to tell us that the Realtor friend the brother hired had listed the house and asked, can he do that?
The short answer is we are not attorneys, cannot answer questions legal in nature, and cannot give legal advice.
From our years of training and experience providing probate real estate services, we know the Executor or Administrator, also referred to as the personal representative, can hire whoever they want, provided the real estate agent is licensed and in good standing. After all, a personal representative of an estate, probate, or trust estate, has a fiduciary duty to act with a high standard of care and exercise prudence in all that they do. At a bare minimum, verifying the California Department of Real Estate License Status is a good place to start.
Real estate professionals also have fiduciary duties we must uphold. Among our best practices is to check the licensing status of all real estate agents who present offers on your listings. You would be surprised what we find!
We often get asked: Does the real estate agent have to be an experienced probate realtor to list an estate home?
Other than meeting the fiduciary duty of exercising a high standard of care, there isn’t a law, per se that mandates hiring a probate realtor to list an estate property. Hiring just any real estate agent with zero probate realtor training and experience is what could get an executor or estate representative in trouble.
We ask, why would anyone hire a real estate agent without training and experience with probate or trust sales? This is serious business.
Is it a case of not knowing what they don’t know? Either way, ignorance is not the best defense.
In most cases, real property is the largest estate asset. Hiring just anyone to manage the sale without first vetting and verifying their knowledge and experience with probate real estate and/or trust real estate leans away from exercising a high standard of care.
Hiring a friend or anyone that takes a listing without first getting a copy of the preliminary title report to (1) confirm the name of the person(s) on the title and (2) know that if it is a probate or trust estate that there are steps that must be taken before the property can be sold may be perceived as ignorance. Yet, that is a roll of the dice if ever required to meet the duty of exercising prudence and acting with a high standard of care. We discuss the steps that must be taken before an estate property can be sold in more detail below.
Think about the risk and liability of hiring an untrained and inexperienced real estate agent. What people do not understand is that if the personal representative is acting irresponsibly, an heir to the estate may file an action to have the court remove their authority and appoint someone else.
Welcome to the land of probate and trust litigation. This is another highly specialized area of law. Not all probate and trust attorneys work in litigation. That does not mean that some attorneys will not agree to take the case. Unlike probate where attorneys are paid statutory fees, litigation cases typically require a signed fee agreement that most likely requires a sizeable retainer fee.
Win or lose the case in litigation the attorney still gets paid. No one likes writing those checks. Attorneys are expensive. Some of the hourly rates for top local attorneys reach upwards of $700.00 an hour. Just like with hiring a real estate agent estate representatives need to vet an attorney before hiring them.
We have worked with clients who hired probate attorneys that were not getting their job done. They were not responding to phone calls and emails or keeping the lines of communication open. The clients did not know the status of their case. This caused a sibling and heir to the estate to hire an attorney to have our client removed as executor. That caused our client to fire their attorney and hire an attorney who would substitute in and take over as attorney for the estate.
In that case, the same day the new attorney substituted in the case, they called the sibling’s attorney and informed them that one of the homes had already been sold. The attorney was gobsmacked. Thrilled and elated that our client, the executor of the estate was in fact doing their job. It was a case of the attorney’s failure to communicate to anyone. We later understood our client’s first probate attorney had left the country for two weeks and did not have anyone minding the business while they were gone.
Shocking news flash, there are real estate agents, doctors, plumbers, electricians, and many other professionals who do the same thing.
Authority to Sell Real Property in an Estate
Call #4: In another call with someone else, the person acting as the personal representative for the estate was going to hire their friend to list the two homes. The sibling calling wanted to hire us. Some people understand the importance of hiring someone who specializes in probate, has the experience, knows, and understands the probate process. We are seeing a trend that the heirs and beneficiaries of the estate know the importance, yet the people named in the will to be the executor seemingly do not know the importance. This concerns the heirs enough to call us, yet we can only help if the person with the authority to hire us consults with us and decides to hire us.
In the case of the second caller mentioned above, we did some research to see if the petition for probate had been filed. It had not. We also researched who was on title to the two homes. Our initial research of the deeds we pulled from online resources on one home revealed:
May 1988 a Grant Deed from the seller to [buyer #1], a single woman, as to an undivided ½ interest and buyer # 2, husband and wife, as joint tenants, as to an undivided ½ interest.
In November 1995 a Grant Deed by buyer #2 severed the joint tenancy with her husband and holds her ¼ interest with her husband as tenants in common. The language in the Grant Deed is clear:
For no consideration I [name intentionally omitted], a married woman, HEREBY SEVER THE PREVIOUS JOINT TENANCY AND GRANT to myself, [name intentionally omitted], a married woman as my sole and separate property, my entire undivided ¼ interest in the following described real property to hold henceforth as a tenant-in-common with my husband, [name intentionally omitted].
In May 2005 an Affidavit – Death of Joint Tenant of [name intentionally omitted] was recorded.
This information left us asking questions, among them, the joint tenancy was severed 10 years prior to recording the Affidavit – Death of Joint Tenant so what are we missing here?
We asked our trusted title and escrow company to determine the chain of title. The Chief Title Officer advised us that a Spousal Order dated May 2005 which conveyed one party’s interest to another was the missing piece of the puzzle. The court confirmed the real property that belonged to the surviving spouse under Family Code section 297.5 and Probate Code sections 100 and 101, and the surviving spouse’s ownership upon the decedent’s death.
What this boils down to is the two people on title each hold ½ interest. Since both are now deceased both estates will need to go through probate.
This is a classic case of why real estate agents need to get the preliminary title report and read it and understand it! We must verify the chain of title is clear. If there are any issues that need to be dealt with they need to be taken care of upfront. Not getting title issues cleared upfront could result in delays in closing escrow on the sale of a home. In the example above, the need to probate the estate of the second person could mean a delay of 6 months or more!
Confirming Authority to Sell a Probate Home
Before we accept an offer to list a probate home for sale, we confirm the person has authority from the court to act on behalf of the estate. If it is probate, we need a certified copy of the Letters and a certified copy of the death certificate. Both must be certified copies. They cannot be copies of a certified copy. They must be original certified copies. Those documents are delivered by us to the title company which updates the title to the property to reflect the representative of the estate is selling the home.
Confirming Authority to Sell a Home Held in a Trust
If it is a successor trustee hiring us, we ask if an Affidavit – Death of Trustee has been recorded. In most cases, the representative does not even know what that is. Not to worry. We know what it is, and we know what needs to be done and we take care of it. We just need our clients to provide us with the documents. In the case of a trust, we need a certified copy of the death certificate and a certificate of trust. If there is not a certificate of trust, we need the section of the original trust that shows the name of the successor trustee. These documents are delivered by us to the title company to update the title to the property to reflect that the successor trustee of the living or family trust is selling the home.
We do not enter into a listing agreement with a personal representative of an estate before we confirm they have the authority to hire us. Some probate clients consult with us before they have court authority. They know they want us to represent them in the sale of the home. Yet, we tell them, once you get the Letters, let us know. We need an original certified copy of the Letters. It cannot be a copy of a certified copy. We also need a certified copy of the death certificate. Getting these documents can take time. Most people already have certified copies of the death certificate. Waiting months for a court hearing for a petition for probate to be filed and the order and letters issued is taking 5 to 6 months these days.
Are we the direct answer to everything – the know-all and end-all of all things probate? With our years of experience in probate real estate combined with many years of experience as a probate paralegal, we have just about seen it all … until another unique situation presents itself. If we do not know the answers or how to appropriately manage a situation, we ask our legal resources. We will not ass-u-me anything.
We continue to see the trend of the need to evict a family member living in an estate home that needs to be sold. While our focus as a probate realtor is helping an executor or other estate representative in Santa Clara County, we have successfully helped people by referring them to an experienced agent in the area of need. If we cannot help you directly we will find someone who can. Contact Kathleen Daniels to get the help you need.