Estate Sales - Selling a Loved One’s Home

9 May 2022

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When a loved one dies, packing up and selling their home is emotionally draining. It’s not something we ever want to do, or even discuss, but we thought it would be helpful to set out a few steps real estate agents, agents, lawyers and executors can take to ensure estate sales go as smoothly as possible.

First things first, do you have the right to sell this property? If there’s a will, then the ‘probate’ process needs to have been completed to empower the executors named in the will to deal with the deceased’s property. This requires lawyers preparing documents to be approved by the High Court. If there wasn’t a will, a similar ‘letters of administration’ process appoints an administrator for the estate.

Occasionally we’ll see executors keen to get a property on the market, so agreements are signed to sell the house with a settlement date conditional on probate being issued. We don’t advise doing this, as without probate, the executor doesn’t actually have the authority to sign that agreement, or perhaps even sign an agency agreement to list with a real estate agent.

Agents and lawyers will likely need a copy of the probate or letters of administration to do their Anti-Money Laundering checks on you. This can involve verifying the executor’s identification and proof of address, investigating how the deceased purchased the property originally, and even getting the details of the beneficiaries of the estate.

We always suggest you have a careful read through the will, to make sure there aren’t any sneaky clauses giving someone the right to live in the house for the rest of their life (a ‘life interest’) – as that could make selling the property out from underneath them problematic!

While it’s not essential, we do suggest that executors have the lawyer move the title into their name (a ‘transmission’) before listing the property, just to avoid any issues. This can also sometimes help purchasers feel confident that they’re dealing with the right person! This, along with applying for an IRD number for the estate, are administrative steps that need to be done before settlement day. The earlier you complete them though, the fewer possible hitches there will be later in the process.

If you have never lived in the property, there are things that you may not know about the property. Do all the chattels work? Have there been any disputes with the neighbours? Did your loved one get all the correct building consents before they renovated? Who knows! Therefore, something that real estate agent should take care of for you is deleting out certain parts of the Sale and Purchase Agreement (‘vendor warranties’) which confirm to the purchaser certain matters.

Finally, where are the sale proceeds going to be paid on settlement day. Is there an estate bank account that they can go into, or will you be splitting it up amongst the beneficiaries straight away? This is something that definitely needs to be discussed with your lawyer before committing to payments to beneficiaries, as distributing estate assets within 6 months of probate being granted can be risky, as within that time period people can still make claims against the estate.

Some of these things may be your lawyer or agent’s responsibility – but it never hurts to have an eye on the detail going on behind the scenes, just to make sure you have happy customers at the end of the day!

If you have any questions about estates, property sales or anything else, feel free to get in touch.