Today I had lunch with my favorite Trust Officer from one of our local banks. We were talking about the state of the economy and how it is effecting trusts she administers as well as the real estate in those trusts. My good friend said she used to administer trusts that had a few hundred thousand dollars in cash and a home that was fully paid for. The home would be sold and the heirs would split a million dollars or more. Those were the good old days. This year she has had a lot of trusts where there was no cash, and the homes had large mortgages on them. This makes her job harder because it costs money to administer an estate and not having any cash till a home is sold is hard. However, the fact that so many homes belonging to people who were in their 80's have outstanding mortgages on them is a recent phenonenum. I have been saying forever that there is a huge portion of the population who never intended to pay off their homes. They were depending on the appreciation of their homes to have money to retire or to pass on to heirs. When the housing market lost equity they (or their heirs were out of luck.) Even in a market that has held up much better than most of the country, this is a shift in retirement and inheritance plans of many people. The Asian chicken salad was delicious, despite the depressing conversation. As some of you may have noticed, I've been selling a lot of trust sales recently. The question frequently comes up: What is a trust sale? What does a trust sale involve?Here is a brief overview of the process: The short answer to this is that a trust sale is the sale of a property that is held by a trust where the original trustee is either under a conservatorship due to an inability to handle his/her affairs, or the original trustee has passed away. There is an executor of the estate of the deceased property owner or a conservator who is acting as the trustee for the estate. The trustee picks a realtor to represent the estate in the sale of the property. The property is marketed and offers are received. The offers must be “As-Is” and the estate is exempt from several disclosures. In Ca. the exempt disclosures include the transfer disclosure statement, the seller’s supplemental or seller’s questionnaire, smoke detector disclosure and installation, and signature on the Natural Hazard Disclosure Statement, but the report must be provided. Although the trustee is exempt from some of the standard disclosures anything that is known by the trustee or realtor must be disclosed. Once the trustee accepts an offer on a deceased estate the heirs must be given 45 days to sign the notice of proposed action. If anyone objects the estate needs to go to court to get the right to sell the property. If there are no objections the sale goes through. If the home is under conservatorship the trustee does not need to give a notice of proposed action because the profit is any, stays in the estate and is not distributed to multiple heirs. Trust sales can be a good option for a buyer. They are often owned by long time sellers and therefore the estate often has enough equity to withstand the downturns in the market. If property is being sold the trustee has usually determined that the estate needs to sell the property and will sell it at the price the market will bear, as opposed to a price that someone wants. This is not always true, but often is. If you are a trustee and need to sell a property it is a good idea to hire a realtor who understands the duties and responsibilities involved in selling a property held in trust and who is able to work well with the estate’s attorney. I hope this is a clear overview of the process. If you have any questions please feel free to ask. Or go ahead and post in the comments section of my blog, Silicon Valley Real Estate. PROBATE SALES: THE BASICS THE BASICS 1. Probate courts have various responsibilities, but in regards to real estate probate is the process of distributing the estate of a deceased person, called the decedent. The estate is any property or cash that has not been distributed into a trust. 2. The decedent can either die leaving a will (testate) or not leaving a will (intestate) In either case the estate needs to be probated in order to distribute the assets. (property, cash, real estate)
3. If there is a will, a Testate Estate, the person named in the will as the executor can petition the court to be appointed the personal representative of the decedent and be responsible for disposing of the assets. If that person does not want to serve as the personal representative, or if there is an objection from the heirs, or if that person is not eligible then another person or sometimes a trust department at a bank, can be nominated to serve as the representative. 4. If there is no will, an Intestate Estate, the court will appoint a personal representative, or the heirs can nominate someone for the court to approve. Again, sometimes this is a trust department in a bank. 5. Once a personal representative is appointed that person or trust department is responsible for distributing the assets of the estate to the heir or heirs. If this includes property a realtor will be chosen to help sell the home.
6. If the personal representative asks the court for full authority to sell under the Administration of Estates Act (AEIA)then the representative has the right to sell the real estate without court confirmation. 7. If the representative does not request full authority to sell, or the court does not approve an AEIA, then the sale takes place but needs court confirmation. 8. If court confirmation is needed an offer is accepted by the representative and then a court date is set. At that court date another buyer can come in and offer at least a specified amount over the accepted offer. There can be no contingencies and the first buyer has the opportunity to beat newer offers. This process is rarely done anymore. These are just the basics and I'll put another post up later with more details. But the important question is why should you care? Well, there is a great reason to care if you are a buyer or a seller. If you are the executer, or personal representative you can see that this is a complicated subject and you should find a realtor who knows what he or she is doing. If you are a buyer these sales can be a great investment for you. In general, if a home is being sold as a probate sale it means the estate has to sell. It is much better to buy from a seller who has to sell than a seller who wants to sell if they get the right price. You get similar advantages to buying an REO or Short Sale, but a lot fewer hassles. If you have any questions about probate sales please feel free to contact me or post them on my blog, Silicon Valley Real Estate. 
To Fix or Not Fix in a Probate or Trust Sale If you have been given the responsibility to sell a home through probate or trust there are many things to consider. Right now, I want to talk about one. What should you do to the home to put it on the market? There are many right answers to this question, and a few wrong ones as well. Let’s discuss. First of all, many homes that are in probates are trusts have been well used. There are often deferred maintenance issues as well as great cosmetic challenges. If your probate or trust home is in beautiful shape you can skip this blog post. If not, which is more likely, please read on. The most important thing to remember is that you should not fix structural problems, just disclose them. The reason for this is that the estate will become responsible if you do something like re-pipe the home, put on a new roof, or upgrade the foundation. If the contractor does something incorrectly, or without needed permits, the liability to the estate will be on your hands. So just get the home inspected and let the potential buyers know what they are getting into.  | | A BEFORE PICTURE OF A KITCHEN I WORKED ON WITH MY PARTNER |
That said, these homes are often dirty, smelly, ugly, or just outdated. Very often home appearances are ignored during the end of an owner’s life. It is totally normal and not a moral flaw on anyone’s part, so don’t worry about snarky neighbor, buyer, or agent’s comments if they occur. It is perfectly ok, and even beneficial to do some cosmetic upgrades and staging.
What I tell my clients when I list a probate or trust
home is that we are trying to remove the yuck factor. When a potential buyer comes into a home we just do not want them to say “yuck.” It is amazing what paint, removing old carpet, and replacing lights and electrical faceplates can do. Paint and an air filter can even help remove the smell of cigarette smoke. If the home has carpets with smoke smell they will have to be removed. Old fashioned drapes can be removed and modern, inexpensive ones from places like Bed Bath & Beyond can be used. The kitchen can have old cabinets painted and new hardware installed for a whole new look. Staging is essential and can really change the feel of a home from old and dated to “I can live here.” It does not even have to be in every room, but if you can do the living room and one bedroom even that is a help.
 | | AFTER PHOTO OF KITCHEN |
There are plenty of investors in the market who will want to purchase a probate for as little money as possible, but you also want to appeal to the buyer looking for a home to live in. By taking away the yuck and replacing it with this looks livable, you will get a much better price for the estate. Please feel free to contact me if you have any questions about probate or trust sales. I would love to hear from you. At the beginning of probate when there is a petition to administer the estate the court will appoint someone to be the personal representative of the estate. This is often the person that was named as the executor in the will, unless that person is unavailable, unwilling, or there is a challenge from someone else. Once the personal representative is appointed, the court will also appoint a probate referee. This person is charged with valuing the estate including the personal property and real property. There is a form that the personal representative is supposed to fill out within 60 days which gives the value of the estate for both tax purposes, and in order to settle the estate. 
The referee will determine the fair market value for the estate and in the case of a probate sale that needs court confirmation the general rule is that the offers should be within 10% of this value. It is possible to sell the home for less, but a little trickier and often involves re-doing the appraisal. The sales that require court confirmation can not be confirmed until the referee has valued the estate.
If the personal representative has full authority to sell the real property without court confirmation then the sale can go through, but the probate can not be completed and the monies distributed until the referee has done his or her job.
If you have any questions about buying or selling a home in probate in San Mateo County or Santa Clara County, please feel free to contact me. I am an experienced probate realtor.
Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Short Sales and Trust and Probate Sales Memories can be housed in stuff, especially as people gets older and they find that objects are needed to jog their memory. The problem is that very often when it is time to leave the place that has been home for 30, 40, or 50 years, there is wall to wall stuff. The plate on the wall that was handed down by great grandmother is probably not going to be wanted by great grandchild number 1. However, with the normal tensions that arise in settling an estate, and the enormous popularity of shows like Pawn Stars and Antique Road Show, many heirs believe that the house full of stuff they have inherited may be worth something. Also, if you need to sell a probate or trust home in order to settle an estate this stuff needs to be cleared out. In order to keep the peace in the family and to make sure that nothing is overlooked the most logical thing to do is get the personal contents appraised. If the sale is a probate sale, this is already written into code. A probate referee will be in charge of making sure all of the personal effects are inventoried and appraised. If the property is in a trust, the personal effects are the responsibility of the trustee of the estate. If you are the trustee, get everything appraised and sold by a professional estate seller. You can get a company like DGW to come in and take everything to their warehouse to be sold at multiple auctions. Or you can have an estate sale at the house and then get rid of anything that does not sell. The point is, get a professional who is trustworthy to sell things for the most that they can sell for. If there is something valuable these people will know and it will keep the peace in the family. My only other advice would be go through all the papers, envelopes, and furniture yourself. You never know where mom may have stashed cash for an emergency. You are more likely to find money that way, than in the antique piano that no one wants. If you have any questions about trust or probate sales please feel free to contact me. Marcy Moyer Keller Williams Realty www.marcymoyer.com marcy@marcymoyer.com 650-619-9285 D.R.E. 01191194 
What is a Notice of Proposed Action in a Silicon Valley Trust Sale? If you are a trustee selling a Santa Clara or San Mateo County Trust sale, or a potential purchaser of a trust sale you will probably encounter a Notice of Proposed Action. What is it? The successor trustee has the right and power to sell property left in a trust to be distributed to the heirs. The trustee chooses the agent to list the property, and is responsible for handling the details of the sale. However, in order to accept an offer from a potential buyer the heirs to the estate have to confirm that they agree to the price and terms of the offer. Usually they do and the sale proceeds, but if there is an objection then the trustee must go to court and get the objection heard and settled by consent of the heir, or order of the judge, in order for the sale to proceed. Obviously this will delay the close and must be included as a contingency for the seller. This is very rare, but it can happen occasionally, so be prepared. Marcy Moyer Keller Williams Realty www.marcymoyer.com marcy@marcymoyer.com 650-619-9285 D.R.E. 01191194 Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Trust and Probate Sales Nov. 8, 2010  When you sell or purcahse a trust or probate sale, the disclosures are not the same as in a standard equity sale. The basic premise is that while the trustee or personal representative in the case of a probate does not fill out a Transfer Disclosure Statement or Seller's questionnaire, if that person knows anything about the house it needs to be disclosed. It can go on a separate addendum but can not be hidden. This is especially true if that person lived in the home with the person who has died, like a child, or other relative. There are CAR forms which should be used, The Probate Advisory or the Trust Advisory, that spell out which disclosures are exempt, and which are not. The trustee or personal representative are exempt from filling out the TDS, Seller's supplemental or questionnaire, They do not have to sign a Natural Hazard Report or provide a Mello Roos Report. They do not need to provide smoke detectors. they do not need to provide the Hazard Booklet. They do need to provide a Natural Hazard Report, strap the water heater, provide a lead based paint disclosure, Data Base Disclosure, and FIRPTA. I hope this clears it up and that you do not find anything terrible lurking behind the curtain. Please feel free to contact me if you have any questions. Marcy Moyer Keller Williams Realty www.marcymoyer.com marcy(At)marcymoyer(Dot)com D.R.E. 01191194 650-619-9285 Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Trust and Probate Sale 
If you are buying or listing a home that is being sold through the probate process my congratulations. It is a great niche to be involved with. One of the first steps in the process is to have the estate appraised. A probate appraiser will come in and give an opinion about how much the home is worth. Most of these appraisers are honest, hard working people, but occasionally you will run into a problem. The appraiser may over inflate the worth of the property. This can cause a potential problem down the line when the home is listed and sold. First of all the heirs are going to expect that if the appraiser comes in and says this home is worth $600,000 the probate court is going to have a hard time approving a sale at $500,000, and the heirs are not going to be too happy.  You are probably asking: why would this happen? It may just be a mistake, but it may also be because the probate appraiser pay is tied to the value of the estate, so there is an incentive to over appraise the value.If this happens, just be over prepared to justify what the true market value is. A good realtor should be able to do this in his/her sleep, so if you are a buyer, use a good realtor. If you are a realtor, make sure your CMA is airtight. If you have any questions about probate or trust sales, feel free to e-mail or call me. And if you are interested in reading any of my other posts about probate sales, here's a link: WHAT IS A PROBATE SALE? |
|
