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Trustee selling off-market
Dear Phyllis,
My mother recently died, and I am the sole trustee of her estate. My three siblings and I are the beneficiaries. Our sister has lived in the home and has been taking care of my mother for the last several years. My sister has five cats, and not only does the home smell, but it is in horrible condition (she is also a beneficiary). There is a reverse mortgage, so we need to sell quickly.
Because of the condition and the fact that the home is on a larger lot, it might just be sold for land value. I grew up locally and am embarrassed to have the home shown in its present state. The trust attorney is telling me I have a fiduciary duty to list the property in the multiple listing service to sell for the highest possible price. What’s the problem with a trustee selling off-market? Leslie
Dear Leslie,
When a reverse mortgage holder passes, the heirs should contact the lender within thirty days. The heirs have six months from the date of passing to sell the property or pay off the mortgage. In some instances, the lender will grant an extension.
At a minimum, you should have the home professionally cleaned. If you decide to go further and spruce up the home, how will the renovations be paid for? Some other real estate agents and I offer to front the costs of these repairs. But as the reverse mortgage clock is ticking, what is the timeline to make these improvements? Ask a local Realtor® to provide you with an AS IS value and an AS REPAIRED value. In your instance, the cost of further improvements most likely won’t be a sound investment.
I can understand your embarrassment about showing the home in its present condition. As the trustee, you have an obligation to sell the home for the highest possible price. Likely, your attorney had an appraisal completed or a date of passing evaluation, which should have provided an estimated value at the time of your mother’s passing.
Although you are the sole trustee, I suggest you express your thoughts with your siblings. Your parents selected you to be in charge, but perhaps your siblings share the same concerns. If they do, have another discussion with your attorney to determine if you can sell the home off-market within a certain range of the appraisal.
Once you establish the home’s value, you might find an off-market buyer.
Best of luck to you and your family.
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