A death in the family can be difficult, no matter the circumstances. Take time to grieve, but do not wait too long before starting with estate administration functions, especially if you need to deal with real property like a home or cabin.
If you are designated a personal representative in a loved one’s will, it is vital to ensure that a property is maintained to avoid damage. Have sprinkler systems been winterized? Will a lawn care service be needed to keep the grass and gardens alive?
Because this is probably one of the few times you are handling the real estate of someone else, bring in professionals. An estate administration attorney can help get the process started. A real estate agent with experience selling estate properties can offer advice on what needs to be done before listing.
Why a will is important
Hopefully your loved one left a will indicating a personal representative designation and providing guidance on what to do with a property. A trust or family LLC may have been set up to keep a mountain cabin in the family, for example. A will might contain a provision allowing an adult child to remain in a Cherry Creek or Washington Park home with rental terms.
Without a will, it can be significantly more difficult to know what to do and complete a sale. Obtaining the resources to get a property where it needs to be so that it can be marketable may also be more difficult because it often takes longer to resolve intestate estates (ones where there is no will).
The value of a home is often subjective and comes down to what a buyer will pay. Get an independent market analysis. As a general rule of thumb, estate sales bring in 60 to 70% of market value. This may not hold true, however, in many Denver metro neighborhoods where homes (regardless of wall-papered bathrooms and outdated kitchens) are in demand. In certain areas, competing buyers may even bring in multiple offers.
Before listing the property, make sure that everyone who must sign off on the sale is on the same page and agrees on price and basic terms. Keeping all the heirs involved and informed throughout the process is also helpful and can avoid accusations of improper conduct.
Selling sooner rather than later may avoid some of the problems that can crop up when a property sits vacant. And regardless of what a loved one paid for the property in 1965, the basis for tax purposes is stepped up to the value at the time that the person passed away. For more individualized legal advice, schedule an appointment with an estate administration attorney.