5 things to know about selling your parents’ home

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Becoming the executor of her mother’s estate in 2014 was a hard lesson in the intricacies of selling a childhood home, says Linda Concas. There were many surprises in getting the Huntington Station house that she and her three siblings had grown up in ready for market, such as huge amounts of paperwork and hiring a real estate agent.

“I hadn’t realized I would have to pay the bills like heat and electricity for several months, and there was an expensive water leak that we had to have repaired,” says Concas, 56, a Suffolk Police Department school crossing guard. “It was like a full-time job on top of the full-time job I already had all while I was grieving my mom.”

As executor of her mother's estate, Linda Concas recently sold...

As executor of her mother’s estate, Linda Concas recently sold her mother’s Huntington Station home, above, an experience that felt “like a full-time job.”
Credit: Debbie Egan-Chin

Handling the sale of your parents’ home after they’re deceased is already a fraught situation without having to deal with unforeseen tasks like Concas did.

If you find yourself in the position of being an executor, here are five steps you should be prepared to take on.

1. Talk to your siblings

Unless you’re an only child, you’ll have to discuss with your siblings what to do with the house, whether that means keeping, selling or renting it, says Christina A. Williams, a licensed real estate associate broker with Signature Premier Properties in Garden City and an attorney.

“Everyone might not be on the same page, so my advice would be to have those conversations so it’s established right away,” says Williams, 31, who recently helped her father sell her family’s five-bedroom, four-bathroom house in Elmont after her mother died in January. 

“You'll be surprised how emotional you can get about your...

“You’ll be surprised how emotional you can get about your childhood home,” Williams says. “There’s an attachment to it that I don’t think I was ready for yet.”
Credit: Debbie Egan-Chin

“It has to be worked out and agreed to because you can’t backtrack once you’re in contract,” Williams says. “I know it’s family, but the reality is money does create rifts, so my advice is whatever the decision is, put it in writing with a lawyer.”

All of these are tough conversations to have while you’re in mourning, Williams acknowledges. “You’ll be surprised how emotional you can get about your childhood home. There’s an attachment to it that I don’t think I was ready for yet.”

Reba S. MacDonald, a licensed real estate associate broker with Signature Premier Properties in Dix Hills, says that if a sibling wants to keep the house and the others don’t, they can retain a mortgage and buy out the other siblings based on the appraisal value.

2. Know which pros to hire

Regarding that appraisal, Mary P. O’Reilly, an attorney at Meltzer, Lippe, Goldstein & Breitstone in Mineola, recommends hiring an appraiser to get what’s called the stepped-up basis, which means the home is inherited at fair market value at date of death.

“If your parents bought the house 40 years ago for $50,000 and the estate is selling it today for $550,000, that’s $500,000 of gain. So when you sell that home, typically it’s not subject to any income tax, which is good news,” she says.

An estate attorney can help you with that, as well as negotiations with siblings. Concas hired one, and she says it “was one of the best decisions that I made. She explained everything to me that was going on and she gave me a to-do list. I followed her advice to the letter and that worked out very well.” The cost of hiring an estate attorney can vary widely depending on your family situation, but a typical range is between $2,500 and $5,000.

You should also hire a real estate agent rather than sell the home yourself, says Jaime Aguilar, a licensed associate broker at Coldwell Banker American Homes in Merrick. “You may attempt to sell it in order to avoid having to pay a commission to a professional. But you’re going through an emotional situation and selling a house can be a daunting task. It’s better to delegate to someone who is going to be able to make rational decisions instead of emotional decisions.”

3. Assess outstanding issues

Part of the executor’s fiduciary duty is to preserve the assets of the estate, and that includes maintaining the house, says MacDonald. She suggests getting a home inspection so you can address issues before putting the home up for sale. A typical fee for a 3,000-square-foot home is about $550.

“Sometimes there’s leaks that you don’t know exist, which can lead to other issues like mold,” she says. “These are all the issues that delay or possibly hinder a sale.”

Another issue that can delay a sale is an outstanding lien. Aguilar suggests hiring a title company to do a search on the property. “Taxes may be in arrears, or the parents had a home equity line of credit or a reverse mortgage the adult child doesn’t know about,” he says. 

According to MacDonald, the search should include checking for open certificates of occupancy (COs). Concas didn’t know that the small extension her father had built over the backyard stoop and a shed both needed COs. “I had to do all that paperwork while the house was up for sale to make sure I had the allowance for that,” she says. “Look into those things immediately, because it takes time to get them.”

4. Maintain the home

Until you sell the house you have to stay on top of all the bills, Aguilar says. He suggests gathering all related documents like oil, light and gas bills, the mortgage, property taxes and homeowner insurance.

Because a vacant home is at a higher risk for break-ins and vandalism, Tina McGowan, an associate real estate broker at Daniel Gale Sotheby’s International Realty in Cold Spring Harbor, recommends contacting the insurance company to make them aware of the status of the house. The policy may not cover it being vacant, but some companies can give you a vacant home insurance policy.

“The best scenario is just to be able to tell them that somebody’s in there watching the house,” McGowan says. “If you can’t find somebody who can check on a constant basis, hire a real estate person. Anything could happen, especially in the winter months, like a burst pipe.” 

She adds if you have the luxury of being able to keep the house for a while without selling it, you may want to rent it. “The benefits are twofold. The rent covers expenses, plus you have somebody who’s keeping an eye on the house.”

5. Prep for the sale

The first task of getting the house sale ready is to clean out the contents, says MacDonald. She acknowledges this can be a painful process, and depending on how much your parents saved, time-consuming as well. All items in the house belong to the estate, says O’Reilly. “Often the beneficiaries decide what everybody’s going to take and split it between them, hopefully amicably.”

But you may not want to market a house that’s entirely vacant. “Stage it with some furniture, do some modest updates like painting, and get a Realtor to give you advice so you know where to spend your money,” O’Reilly says. Staging costs start at around $250 for a consult and can reach into the thousands for renting furniture and accessories.

The dining room at the Floral Park home of Mary...

The dining room at the Floral Park home of Mary O’Reilly’s late father-in-law before and after it got a makeover to prepare it for sale.
Credit: Mary O’Reilly

For instance, it’s probably not the time to invest in a kitchen renovation because that can take several months. Further, Aguilar says, they’re expensive, starting at about $20,000. But cosmetic changes, such as sprucing up the landscaping by pruning overgrowth, can increase curb appeal.

When O’Reilly’s father-in-law died in December 2020, she and her husband repainted the entire house where his parents had lived in Floral Park for 35 years. They also pulled out the carpets and redid all the floors. “We didn’t replace anything, but we put in new hardware and paint, all DYI, and we staged the furniture,” O’Reilly recalls. “For our $25,000 investment, when we sold the house six months later, we probably got $100,000 extra.”

Whether you’re paying the utilities, repairs or minor upgrades to improve the chance of a sale, Aguilar says you should maintain a record of all your expenses as they will be reimbursed from the estate.

But, he adds, “The goal isn’t to make more money on the sale; it’s to settle your parents’ estate. If you were to find a buyer as soon as you put the house on the market, even if the process were super smooth, that could be easily another two months. You have to keep in mind that time is money.”



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2022-05-17 20:12:14

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