Can you sell a house during probate in Seminole County?
Yes, you can sell a house while in probate in Seminole County, Florida. This is true whether a will exists or not (intestate). The profits would first be disbursed to creditors of the decedent and the heirs would receive the remaining balance.
Some reasons why the court allows you to sell a house in probate are saving money and lessening the burden of ongoing house maintenance.
If you are reading this article your father or mother has probably just passed away and you are an heir to their property. Maybe you are aware that the property has a mortgage and it still needs to be paid. With each passing month that the property is in probate it’s easy to see that this mortgage is a financial liability. Rather than having the mortgage payments come from the court’s liquidation of assets, you can opt for a quick sale.
If you are the executor (personal representative in Florida) you can submit to the judge a real estate investor’s offer for the sale. If the offer is accepted you will have maximized the total amount of money that you (and your siblings) will be receiving at the end of the probate.
You may have noticed in the last paragraph that I wrote about getting a real estate investor’s offer instead of a realtor. This is not because of bias from the fact that we are real estate investors. It’s because it is usually the only workable solution.
If you try using a realtor to sell the house he will ask you to invest money into house renovations before putting it on the MLS open market. You of course need to have this money beforehand. You also need to sacrifice time to hire contractors and to make sure the renovations get done correctly.
If you don’t put money into renovations while working with a realtor it’s unlikely the house will sell. That’s why you need to sell the house to a real estate investor whose job is to do renovations.
If you are living in a state that’s different from the decedent’s property in Florida, dealing with the renovations is especially cumbersome. Since there would be an ancillary probate that you would have to focus on in your own state it would be difficult for you to travel to Florida to check on things. Even if, for example, you lived in Oviedo and the probate house was in Altamonte Springs, the travel within Seminole County would make working with a realtor prohibitive.
Selling a house during probate with no existing will
About 70% of all decedents in Seminole County have no will prepared before their death. That means there’s a good chance that you as a beneficiary could be fighting with your siblings about who gets what.
Sadly, the assets other than the property, life insurance plan and retirement funds are not part of the probate process (Statute 732.402) so they are up for grabs and not systematically disbursed. The items of contention could be cars, appliances, art or any other thing you can imagine.
If you are the family member that was picked by the judge to be the administrator of the estate you can be sure you will be at the center of your siblings’ attention. You definitely don’t need the compounded stress of dealing with family infighting and micromanaging the house renovations.
A real estate investor is there to make the transfer of assets convenient and fluid. The lower price that he buys the house at is justified because of the raw materials and labor that he has to put into the house for a successful sale.
With this in mind, be grateful that Florida law makes provisions for selling a house while in probate. Without it you could be waiting between 7 – 18 months to complete the sale.
Unfortunately, if one of your siblings contest the conditions of selling the house you would have to wait many more months before you can sell. That means making more mortgage payments until that time and at the end the final payout would be less for everyone.
Problems with selling a house during probate through a realtor
1) Of course you can sell a house in probate through a realtor but this article has already debunked the logistics of this arrangement. Even if you live in Oviedo and have to manage the probate house in Altamonte Springs, the repeated trips to the house would be inconvenient.
2) The time it takes for a house to sell through a realtor makes this option prohibitive. Can you really wait 3 to 7 months for your house to sell if it does at all? In some cases the probate is prevented from closing because of this.
3) Potential buyers can do inspections of the property and can submit offers with requests for repairs to be done before the sale. With these repair issues potential buyers negotiate with the realtor for a lower price. In the end the realtor typically asks them to accept a credit at the closing, In these situations you have to wonder why a real estate investor wasn’t used instead because investors buy with the intention of doing these kinds of repairs.
4) Your realtor will ask you to clean and stage the house for showings. Potential buyers need to come in and see the house before they buy.
5) You will need to pay a landscaping company every 2 weeks to cut your lawn and manicure the foliage. Your real estate agent will expect you to take care of this because curb appeal will be important to increase the chances of a sale. Also, code violation fines in Seminole county can be steep and you want to avoid them.
6) The typical realtor commission of 6% is the same whether you live in a low income area like Casselberry or an upscale area like Altamonte Springs. Can you accept this percentage when your goal was trying to get more by selling on the open market? Add another 3% for the probate attorney and you can realize how much you would be losing.
Seminole County Clerk of Courts #1
301 N Park Ave, Sanford, FL 32771
Phone: (407) 665-4300
Seminole County Clerk of Courts #2
101 Eslinger Way, Sanford, FL 32773
Phone: (407) 665-4450
Seminole County Clerk of Courts #3
376 Wilshire Blvd #376, Casselberry, FL 32707
Phone: (407) 665-4700
Steps for selling a house during probate in Seminole County
1) Filing your petition – You need to do this at your local county clerk’s office to open the probate (see 3 locations above). Filing your petition quickly is important because you might have to wait months before you can get a court date. Your probate lawyer will help you with the nuances of paperwork and gathering together documents like a death certificate.
2) Getting authority to represent – This is done during your first court appearance. You need to know that before you are approved to sell the house as the personal representative, you are not allow to take any marketing actions to sell the house.
3) Appraising the property – After this step you will have the information to fill out disclosure forms that each buyer will see. You will need your attorney’s help when deciding if issues are too small to disclose. The worst thing you can do is try to hide issues and then open yourself up to litigation.
4) Finding a real estate investor – You need to find a reputable real estate investor who can provide you with a realistic offer. Then you can submit that offer to a judge who will approve or disapprove.
5) Reporting the sale – Once you have received 10% of the sale price from the real estate investor and there are no objections from any other heirs, the sale may proceed.
6) Advertising the sale – This is done through local Seminole county newspapers for a period of 2 weeks. Creditors must be informed of the sale as well.
7) Attending the overbidding session – You would attend a court hearing that would allow multiple parties to make higher offers on the property. Each bidder would give a 10% deposit which is only refundable if the bidder loses.
8) Final distribution – After probate process has played itself out a final accounting is done so that all debts have been identified for payment. After payment has been allotted for debts, the court costs, attorneys fees and executor fees can come out of the remaining balance. Whatever is left is disbursed to the beneficiaries.
Full Authority vs. Limited Authority
You as an executor will have the option of having full authority or limited authority for administering the probate assets. You can opt for full authority if you have good credit which allow an insurance policy of a bond to be linked to your asset (a home).
Under the full authority designation you don’t have to go to court for an overbidding session (step 7). Instead you send out a notice of proposed action to all beneficiaries which outlines the sale price and appraisal value. If there are no objections within 15 days the beneficiaries will be in ‘tacit consent’.
It might be intuitive to think that having limited authority is the best way to sell a house during probate. But the reality is that if you have multiple bidders, the first bid price comes in very low. This low bid is to offset the amount added by other bidders but very well the other bidders might not significantly add to the initial bid. So avoiding the overbidding proceedings by having full authority is the better choice.
Another reason for avoiding the court supervised overbidding session is that your attorney will charge you what is known as ‘extraordinary fees’ which are above and beyond the 3% of the home sale. This is because an overbidding session is outside of what is classified as the normal probate path in Seminole county.
Conclusion
This article sheds light on the frequently asked question, “Can you sell a home during probate in Seminole County, Florida?” Not only is the answer a resounding ‘yes’, it’s actually required before the probate can disburse money to beneficiaries and close. The real issue is knowing what to do during probate in order to sell your house quickly.
For you to reach your goal of a quick sale we have outlined different scenarios in Seminole County, namely the benefits of contacting a real estate investor over a realtor. There are no commissions using a real estate investor as opposed to a 6% commission with realtors. Also realtors will ask you to invest money into the house after telling you that they can get a better price on the open market. Investors buy at a lower price so they themselves can make renovations out of their own pocket.
Lastly, we covered the process of selling a home during probate and how to expedite it. If you have a ‘full administration’ designation from the judge, you can avoid the court supervised bidding process. This will allow you to save on attorneys fees and get a better price for the house.