Inherited a Home in Colorado? Before You Sell, Make Sure You Have the Right Team!

Imagine you are selling a loved one's home. The agent you hired reviewed the will and saw that you are the person nominated to serve as Personal Representative (PR). Your real estate agent listed the home, obtained a buyer, and then the title company discovered you don’t have authority.

Hire an agent who knows the process and will help you evaluate the property, situation, and move forward. Your agent should be able to help you accomplish much of what is needed, such as obtaining quotes from service providers.

I vetted attorneys and am happy to provide referrals. Here is a short list of duties and tasks of attorneys, personal representatives, and successor trustees.

We become your team and work to avoid problems and provide guidance.

Keep in mind this writing is general information, not legal advice, and readers should consult a Colorado probate or trust attorney about their specific circumstances. I provide real estate services as a licensed Realtor®; I do not provide legal advice.

If you are nominated as a PR in a will, consult an attorney. They will walk you through the process to obtain Letters Testamentary or Letters of Administration. If you were nominated in a will, this does not by itself establish authority to act. The court/registrar must appoint the Personal Representative and issue the appropriate Letters. Confirm the appointment and any limits on authority before proceeding with a sale. We will need this to move forward with selling the property.

A successor trustee’s authority generally comes from the trust, different from probate. Consult an attorney to discuss your duties and the trust’s requirements. They will guide you on documents you will need in order to list and sell a property.

The Attorney’s Role

·       Determines whether probate is required.

·       Determines the appropriate type of probate (informal, formal, supervised, small estate, etc.).

·       Determines whether real property is part of the probate estate or owned by a trust, joint tenancy, transfer on death (TOD) deed, or other non-probate transfer.

·       Reviews deed, title history, and ownership.

·       Reviews the will, trust, and estate planning documents.

·       Determines heirs, devisees, and beneficiaries.

·       Identifies interested parties.

·       Files probate documents with the court.

·       Obtains appointment of the Personal Representative with the court.

·       Publishes appropriate notice to creditors, mails interested parties, and more.

·       Prepares any court filings needed to approve the sale.

·       Obtains Letters Testamentary or Letters of Administration.

·       Advises the Personal Representative regarding fiduciary duties.

·       Assists with final accounting and distribution of proceeds.

Estate Administration and Trust Matters

·       Advises the successor trustee.

·       Assists with inventory of estate assets.

·       Determines whether court approval is required before sale.

·       Determines whether an appraisal is required.

·       Advises regarding homestead rights, liens, or other title issues.

·       Reviews purchase contract if requested.

Personal Representative (PR)

·       Was this person named in a will, or appointed by the court?

·       An attorney can seek appointment of a PR if there is no will or no personal representative is named.

·       Do you have Letters Testamentary or Letters of Administration from the court?

·       The attorney can confirm the PR’s appointment and authority.

·       Confirm authority to sell.

·       Determine whether court approval is required.

·       Check for restrictions or special conditions in orders.

·       Check for vacancy-related insurance restrictions, mortgage or reverse-mortgage requirements, HOA/condominium rules, leases, municipal requirements, and any required seller disclosures.

Applicability varies by property and situation.

Executor | Successor Trustee

Representative titles may include Executor, Trustee, Successor Trustee, or Fiduciary.

Real Property and Estate Responsibilities

·       Locate estate planning documents.

·       Secure the residence immediately after death.

·       Change locks if appropriate.

·       Protect valuables.

·       Maintain homeowner’s insurance.

·       Continue payment of utilities as appropriate.

·       Maintain landscaping and snow removal.

·       Protect the property from damage or vandalism.

·       Notify the mortgage company if applicable.

·       Continue payment of property taxes.

·       Keep detailed financial records.

·       Open an estate bank account.

·       Obtain an EIN for the estate if necessary.

·       Maintain copies of all estate documents.

·       Keep beneficiaries informed.

·       Calculate carrying cost per month.

·       Keep records of required notices and deadlines, creditor claims, property expenses, and communications with beneficiaries. Ask the attorney which records and reports are required in the specific estate or trust.

Property Responsibilities

·       Have the attorney confirm authority to sell.

·       Determine whether court approval is required.

·       Determine whether an appraisal is needed.

·       Obtain a date-of-death valuation of the property if required.

·       Document the condition of the property.

·       Inventory personal property in the home or on the property.

·       Decide what personal property to sell, distribute, donate, or discard.

·       Coordinate clean-out of the residence.

·       Authorize repairs or maintenance.

·       Obtain bids for work if needed.

·       Keep records of all expenditures.

·       Review preliminary title report.

·       Work with the attorney regarding title defects.

·       Select a Realtor® or work with the appointed Realtor®.

·       Review offers.

·       Accept the best offer consistent with fiduciary duties.

·       Execute closing documents.

·       Deposit proceeds into the estate account.

·       Maintain records for final accounting. If the property is trust-owned rather than estate-owned, do not assume sale proceeds belong in an estate account. Confirm the correct account and handling of proceeds with the attorney and title company.

The Realtor® | Real Estate Agent’s Role

Before Listing

·       Verify authority of the Personal Representative.

·       Obtain copies of Letters Testamentary or Letters of Administration when applicable.

·       Confirm ownership through title.

·       Verify how title is vested.

·       Coordinate early title company review.

·       Discuss probate requirements with the attorney when appropriate.

·       Recommend trusted vendors (clean-out, estate sale, repairs, movers, locksmith, junk removal, cleaners); obtain quotes.

·       Recommend repairs, improvements, and staging; obtain quotes.

·       Provide a comparative market analysis. If a court order is needed to address the sale, ask the attorney what market evidence, valuation, listing history, or buyer-demand information would be useful to provide.

·       Recommend pricing strategy.

·       Coordinate professional photography.

Listing

·       Prepare MLS listing.

·       Upload offer submission instructions.

·       Disclose probate requirements when appropriate.

·       Coordinate showings.

·       Communicate with the attorney and Personal Representative.

·       Present offers.

·       Explain differences between probate, trust, and traditional transactions.

·       Monitor contract deadlines.

·       Advise the executor regarding pricing, carrying costs, repairs, and more.

·       Implement marketing plan

Under Contract

·       Open title (prior to contract).

·       Coordinate with title company.

·       Review title commitment.

·       Assist with buyer inspections.

·       Coordinate repair negotiations.

·       Coordinate appraisal appointment.

·       Coordinate repair request negotiations.

·       Assist the attorney if court approval is required.

·       Keep beneficiaries informed through the Personal Representative when requested.

·       Monitor buyer financing.

·       Coordinate closing.

Closing

·       Coordinate final walk-through.

·       Verify estate documents required by title.

·       Coordinate signing with Personal Representative.

·       Confirm funds are payable to the correct estate or trust account.

·       Assist with possession and post-closing issues.

·       Remind PR and successor trustee of wire fraud prevention.

Additional Probate-Specific Tasks Often Overlooked

·       Comprehensive market analysis (see prior blog "When the court orders the sale of real property"): calculate average days on market (DOM) for similar homes, buyer demand, identify conditions affecting the sale, and provide documentation to the attorney to help draft court orders.

·       Determine whether the property is occupied.

·       Address tenants if the property is rented.

·       Verify HOA status and dues (title company may assist).

·       Obtain payoff statements (title company may assist).

·       Identify liens or judgments (title company may need to collaborate).

·       Verify permits for additions or improvements.

·       Arrange winterization if vacant.

·       Coordinate vacant home checks.

·       Coordinate estate sale or auction with the PR or successor trustee.

·       Coordinate donation of remaining personal property with the Personal Representative.

·       Coordinate disposal of hazardous materials.

·       Verify smoke detectors and carbon monoxide detectors are operational.

·       Coordinate cleaning after move-out.

Closing Thoughts

This, of course, is a brief outline. Each situation is different. PRs and successor trustees can understandably become overwhelmed by the process. Don’t go it alone. A team of vetted professionals is available to help.

Let’s start with a conversation.

Considering selling an inherited property? Call Tamara to discuss your situation and next steps.

About the Author

Tamara Grosvenor, Realtor®, J.D., is a real estate advisor with Compass and blogs for Boulder Property Advisors. With more than 20 years of real estate experience and a legal background, Tamara helps clients navigate real estate transactions during life’s major transitions, including probate, inherited properties, and trust-related sales. She can discuss your property, help you understand the real estate process, and refer you to a vetted Colorado attorney for legal guidance.

Disclaimer: This blog is for general information only. This is not legal advice. Each estate, trust, and real estate transaction may require different steps. Start by consulting a qualified Colorado attorney.