Grossman Law Firm Blog

Many executors are worried about what to do with the real estate they control in probate estates.  The fears of holding on to residential real estate in Riverside, San Bernardino and San Diego Counties is well justified.  A recent newspaper article says we are in for another one to two years of declining real estate values.  That article can be viewed here http://www.nctimes.com/articles/2008/07/01/business/z82ae2726b0f49f7a882574790075
c6b6.txt.

In the  real estate market we have now executors are well advised to either sell their real estate at auction or use a real estate agent who is both well aware of current market prices and will recommend the price be reduced as needed to keep pace with a declining market.  An auction has the benefit of finality and the likelihood of bringing a true market price for the property.  A good auctioneer will advertise the upcoming sale for weeks before the scheduled auction.  When auction day arrives the executor (and beneficiaries) can be confident the best possible price for the property will be obtained.  Some recent auctions in southwest Riverside County have resulted in overbids because the properties were aggressively priced and the bidders then bid up the prices.

Using a traditional real estate agent can also work but the agent needs to be realistic with the executor.  Everyone wants to hear they will get the price they want for their property.  That’s not helpful in today’s real estate market.  The executor should challenge the real estate agent to provide a realistic price based on current sales of comparable properties.  With those prices in mind a sales price should be set with the realization that price may need to be reduced if the house does not sell quickly.

In the Riverside Probate Court recently I saw an interesting and enlightening argument about what to do with a house that would be going through probate.  (This could just have easily happened in the San Diego probate court or the San Bernardino probate court.)  A brother and sister were disputing the admission of their mother’s will to probate.  Either way, the house was going through probate.  There was obvious animosity between them and a long history to the case. 

While the case dragged on someone asked for the appointment of a special administrator.  The sister was living in the house, rent-free, while the case dragged on.  The probate judge was being asked to leave things this way since the trial wouldn’t happen for another six months, if that soon. 

On the face of it, the request wasn’t completely absurd (though it would have helped if the sister offered to pay rent) because no knew who would wind up with the house.  Even so, the judge made clear in probate the court will act to preserve the value of the estate.  In a declining real estate market, the judge reasoned, the only way to do that was to have the house sold.  The winner of the will contest would get the proceeds from the sale of the house.

The lesson: in the Riverside probate court expect to have the home sold if you don’t have title to it.