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Probate is the term used for the legal process that takes place when settling an estate—the accumulated assets, property and debts of a person who has passed away (the “decedent”). As the saying goes, “You can’t take it with you.” Because real estate is often the largest single asset class within an individual’s estate, and because that real estate is often sold to raise funds to pay debtors and heirs alike, developing a solid understanding of the probate process could prove to be the right choice for the right type of agent.
Reasons to consider developing a niche in the probate space:
- You enjoy serving others during a time of need.
- You enjoy the challenge of juggling the wants and needs of multiple personalities and parties and are good at consensus building.
- You want to differentiate yourself from your peers.
- You want an “evergreen” component to your business—one that remains relatively constant, regardless of the market.
Probate law is state-specific. It’s vitally important to understand the nuances, timelines and requirements of your state’s probate laws. But never lose sight of the fact that your job is to give good counsel with respect to the purchase, sale, leasing and management of real estate—not to render legal advice. While you do need to be aware of the procedures in your state, be prepared to refer clients to competent legal counsel.
The Players
Within probate real estate transactions in all states, there are fundamental players: the courts, the executor, the debtors of the estate, the heirs, and finally the probate attorney. Having a probate attorney is highly recommended and is required by law in some states. The probate attorney is generally engaged by the executor, though any interested party could hire an attorney as a personal representative.
If the decedent owned property in more than one state, the probate will likely have to be filed in multiple jurisdictions.
Once a probate is filed with the court (generally by the probate attorney), the will (if one exists) is reviewed by the court. If no executor has been specified by the decedent, an executor (sometimes called an “administrator”) is appointed. The executor oversees all the estate’s assets and business during the process. The letters of testamentary are the official documents that convey the authority and responsibility (and liability) for administering an estate to an executor. The executor is the only person authorized to act on behalf of the estate. The only way to be certain that the person you’re dealing with is, in fact, the executor is to request a copy of the letters of testamentary.
Before entering into any formal real estate agreement, ask for a copy of the document for your file.
Your Role
The ideal probate real estate agent offers sales, leasing, and property management skills, as well as a one-stop solution for all things real estate. Be ready to refer executors to competent and reliable vendors such as movers, packers, appraisers, contractors, cleaners and landscapers. Creating a seamless process can open doors to future business.
Probate sales can be financially rewarding, as estate properties are often more valuable than average homes. Not only that, executors are typically motivated to sell promptly to settle debts and distribute assets to beneficiaries. However, working in the niche can be emotionally taxing. It’s stressful enough for executors to manage the settling of an estate. Add in their own grieving—and the need to manage the various personalities, agendas, wants and needs of heirs—and it’s easy to see how nerves can become frayed. With patience, support and guidance, you can make a meaningful difference for clients.
