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Considerations when selling a home as an estate administrator

Serving as the executor for an estate or as the trustee for a trust that is part of an estate is both an honor and a lot of work. You will need to fulfill certain obligations, including paying the debts of the deceased individual, as well as carefully following the instructions they left behind in their last will or estate plan.

Executors and trustees have a fiduciary duty both to the deceased person who named them as executor and the individuals who will benefit from the estate. Many times, an executor will need to sell property from the estate, potentially including real estate such as the home of the deceased or any other investment properties they acquired.

These transactions can have a drastic impact on the overall value of the estate. It is important to be aware that there are specific considerations that will inform how you handle these massive, valuable assets.

Locate, price and remove valuable assets from the property

Shortly after you receive notice of the death of the testator and your role as executor or trustee, you will want to take action to secure the property. Changing the locks or adding secondary locks to any points of entry into the home will prevent other family members from removing items that they know have substantial value from the property.

You should catalog all valuable items, from art and electronics to jewelry. Then, you should try to establish a reasonable value for each item and allocate them as outlined in the estate plan documents.

In the event that the items themselves are also subject to sale to increase the estate value, you may want to consider whether including them with the sale of the property or holding a separate estate sale or auction is the best way to maximize the return on the sale of those household items and personal possessions.

You need to follow the instructions left for you in the estate plan

Exactly how you handle the home will depend on the expectations of the testator. Did they want to allow family members to have the right of first refusal on the home? Did they specifically prohibit the sale of the property to family members because they were worried about causing a conflict?

Before you make any decisions or move to list the property for sale, you need to carefully review the documents left behind by your deceased loved one to make sure that you fulfill their wishes. Reviewing the documents can help you avoid common mistakes.

Regardless of who buys the home, you need to maximize the sale value

As an executor or trustee, you have an obligation or fiduciary duty to make decisions that are in the best interest of the trust or estate. That includes attempting to maximize the value of the assets that you sell or liquidate as part of the estate administration process.

While some people may want to keep the family home in the family and will outline that expectation in their last will, others may instead view their home as a valuable asset that represents more value if it winds up sold to an outside party instead of retained by the family.

Whether a family member, close friend or third party is the one making the offer on the home, the executor must establish the fair market value for the property and ensure that any offer they consider meets or exceeds that value. Failing to obtain a reasonable price for the property based on the current market conditions could lead to claims of either corruption for personal benefit or incompetence.

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