If your loved one recently passed away or you are planning for their passing, this post is meant to walk you through important steps for the sale of their property. As a real estate agent with a niche in estate property sales, I will say up front, there are other activities that are not mentioned below. As there is so much to cover, I focused on the most important ones.
Steps for Selling an Estate Property
1. Legal Authority for the Estate
You need to obtain legal authority to act on behalf of the deceased person’s estate before selling the property. This is done by applying for a grant of probate or administration from the Supreme Court of British Columbia. A grant of probate is issued when the deceased person left a will, while a grant of administration is issued when there is no will or the will is invalid.
2. Property Value Assessment
Once you have legal authority to act on behalf of the estate, you’ll need to obtain a property appraisal. This is done by assessing the value of the property based on a variety of factors such as location, size, condition, and comparable properties in the area. As an experienced real estate agent, I can assist you with this.
3. Debts and Outstanding Tax Payments
It is important to determine whether there are loans, liens and outstanding taxes for the property. This would require legal advice and title search. Your lawyer and real estate agent will be able to assist you in gathering this information.
4. Ensure the Property is Ready for Sale
Most estate sales require furniture and personal items removal. Many of my clients hire professional estate sales companies to remove the items with an agreed fixed price. However, with support from loved ones, you can declutter and sell (and donate) items on your own. I have several tips on deciding the best option and how to go about this that I can share.
5. List the Property for Sale
The home should now be ready for sale. A real estate agent, experienced in selling properties of deceased estates, is required for this. I can help you navigate the legal requirements and market the property effectively.
6. Offer Acceptance
If you receive an offer in line with your expected sales price the next step is to closely review the terms of the offer with your agent. Closing dates, subject to sale and other conditions should be considered in conjunction with the sales price, especially, if you receive multiple offers.
7. Sales Completion
Once the offer is accepted, you’ll need to complete the sale. This involves transferring ownership of the property to the buyer, paying any outstanding debts or taxes owed by the estate, and distributing the proceeds of the sale to the beneficiaries named in the will or determined by law.
What if the owner passes away while the home is listed?
Sometimes an owner passes away after the home is listed, or even after an offer is accepted. What happens next depends on how the property is held on title.
If the owner was a joint tenant
The property passes automatically to the surviving joint tenant. It does not go through the will or probate. The survivor files a Transmission to Surviving Joint Tenant application with the Land Title and Survey Authority (LTSA), along with the original death certificate. The LTSA fee is about $83 per title plus small filing fees, and the change usually takes 10 to 15 business days. No property transfer tax applies. Once title is updated, the survivor can carry on with the sale.
If the owner was the sole owner, or a tenant in common
The owner’s share becomes part of their estate. A listing agreement signed by the owner generally ends at death, so the executor named in the will signs a new one. A co-owner who held title as a tenant in common cannot sell the whole property without the executor.
Until there is a grant of probate (or a grant of administration if there is no will), the executor usually cannot transfer title. Many estate homes are listed “subject to probate” so buyers know completion depends on the court grant. In BC, probate applications are generally reviewed in about 2 to 3 months, and longer if documents are missing.
If an offer was already accepted
A signed contract of purchase and sale does not end when the seller passes away. BC courts have held that the estate is bound to complete it. The executor steps in, and completion may be delayed until the grant is issued. If the buyer cannot wait, the estate’s lawyer may be able to apply for a limited grant to complete just that sale.
Probate fees
BC charges no probate fee on the first $25,000 of an estate, $6 per $1,000 from $25,000 to $50,000, and $14 per $1,000 above $50,000, plus a $200 filing fee. For an estate made up of a $1.5 million home, that is about $20,650.
Summary
Most of us are not experienced in what is required when a loved one passes away and there is a property to be sold. Lawyers and real estate agents (specialized in estate sales) deal with these situations everyday. It is important for you to obtain advice from an experienced professional to avoid any mistakes or challenges down the road.
If you are looking to sell an estate property, let’s talk.
Disclaimer: Any information provided by ToddJohnson.ca is not meant to breach any pre-existing agent-client real estate agreement.
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