Selling Inherited Property The Right Way - Part 1


Part One - Get Things In Order

Being the Personal Representative of a probate estate can be a stressful task, especially if the heirs and you don’t see eye to eye. When property and money are involved, people tend to get a little crazy. I’ve created a checklist of the important things you need to get in order.

I’m assuming that you are the person who selected an attorney who filed the petition for probate on your behalf. You’ve been given a court date that your attorney will attend. If all goes well the judge will appoint you as the PR of the estate. You’ll either be appointed the executor if the decedent had a will or the administrator if there is no will. A few weeks after the court date you should be receiving Letters Testamentary (if there is a will) or “Letters of Administration” (no will). These probate documents affirm your appointment as the PR of the estate. The letters give you the authority to handle the financial affairs of the estate and to sell any real property.

Assuming there is real property to dispose of here are my pre-sale recommendations for your probate property whether it is a house, condo, or an apartment building.

Order a Preliminary Title Report
As you may know, a Prelim shows anything recorded against the property. Things like loans, IRS or State tax liens, judgments, notice of unpaid property taxes, etc. We need to check title right away. Hopefully there is nothing recorded other than the mortgage (unless it is paid off). However, let’s say a tax lien shows up. If it is legit, it is going to have to be paid off at the close of escrow and of course will reduce the amount the estate will receive. If it is a mistake, then it will have to be removed. Lots of times a tax lien or judgment will be recorded against someone else with the same name as the decedent. If that is the case, I can have my Title Officer remove it from the report at no charge so that a sale can proceed. I can obtain a Preliminary Title Report from a reputable National Title Company free of charge for the estate.

Check for a Notice of Default (NOD) or Notice of Sale (NOS)
The other thing a prelim will show is if a Notice of Default or a Notice of Sale has been recorded against the property (if the property has a mortgage). It is not uncommon for a PR to start administering a probate and then find out the lender has started foreclosure proceedings against the decedent’s property. In my experience, this happens when the decedent was quite elderly and not maintaining their affairs property.

If the lender has filed a Notice of Default or a Notice of Sale, I can contact the foreclosure department on your behalf to stop the proceedings. The lender may request the Death Certificate and your Probate Letters authorizing you as the PR to prove the borrower is deceased and the property is in probate.  Lenders are very flexible about working with PRs. They gdo not like to foreclose on a probate property if the family is actively working to either bring the loan current or sell the property.

Pull Permits and the Certificate of Occupancy
You should pull the building permits and the Certificate of Occupancy, especially if the property is old or has some additions. We want to ascertain that there are un-permitted additions. Un-permitted bathrooms, kitchens, lofts, family rooms, converted sunrooms, and garage conversions are very common in Southern California. It is generally OK to sell a property with un-permitted additions but the catch is it must be disclosed to the buyer and the property should be sold “As Is” with no repairs. You do not want the buyer to find out after the close that there are un-permitted additions to the property that were not disclosed. I can obtain permits and the C of O from a reputable local permit company free of charge to the estate.

Check for Code Violations
I always check the Department of Building and Safety to see if there are any pending Code Violations filed against a property. It’s common with probate properties that are in really bad condition. If the decedent was a hoarder and never maintained the property, it is not uncommon for a neighbor to complain to the city who then files a citation against the property. Things like non-operational cars on the lawn, overgrown weeds and bushes, trash on the property, busted windows and other things that are an “eyesore” to the community. I can go online to the Building and Safety website and request a code violation report for the property.

Trash Removal Plan
This is the one thing that drives most PRs crazy. How to go through the belongings and then remove all the junk, trash, furniture, and non-valuable personal items from the house in a timely manner. This is especially difficult if you do not live near the property and you have a busy life. Let me share how I trash out my probate listings.

First you and the family need to go through the home and remove all valuables, sentimental items, and anything else you want to keep. Some items may end up donated to a charity. Once that is done it is time for the next step.

Next get a 40 cubic yard roll off dumpster delivered to the property. Then I get 3 or 4 laborers that will remove the remaining items and trash from the property and put them in the dumpster. We need to have plastic trashcans, shovels, brooms, and plastic garbage bags on hand as well.

All electronic waste like computers or printers gets put out for the city’s E-Recycle pickup. Big bulky items like sofas or mattresses go to the curb for the city’s bulky item pickup.

I can generally trash out a 3 bed 2 bath home in 8 hours and with one dumpster. Occasionally for real hoarder situations it might take two. Getting a property trashed out always seems like a milestone in the probate process!

Contact Lender
If the property has a conventional loan or reverse mortgage, we need to contact the bank, see if the loan is current, and get an exact payoff. Hopefully you have the decedent’s current mortgage statement that shows the balance. If the PR can’t find the mortgage statement we will have to contact the lender.

All properties need to have working utilities during the marketing and escrow period, unless the house is a total teardown. The buyer will want to inspect the plumbing, electrical, and heating system during the due diligence period. If they have been cancelled you will need to turn them on in the name of the estate. The main thing of concern is the heating system, especially if the property has an old wall heater or a floor furnace. Banks require a functioning heating system and the appraiser is probably going to check the heating. If the gas is not on the heating system cannot be checked. If you are not sure about the utilities I will be happy to contact LADWP or SoCal Gas to determine the status.

Fire Insurance
You need to maintain a fire and hazard insurance policy. If you have the policy, contact the agent and let them know that the property is in probate. However, a few companies do not cover vacant houses and they may drop you. If this is the case you may need to shop around. As a last resort you can contact the California Fair Plan who is the insurer of last resort. Let me know if you need some help or advice in regards to insurance.

If the property is rented we have a few things I need to find out. Are they regular tenants paying rent? Are any of the renters family members? Do you have their leases? Do you have their phone numbers? Are they cooperative or uncooperative? Are they paying their rent on time or are they behind? Will they willingly move out or does this look like an eviction situation? Should we just sell the property with them in the property (if it is an apartment building) or do we need to get them out? I’ll need to determine what’s going on with them so I can make the proper recommendations.

If the tenant is refusing to move or not paying rent, you may need to hire an eviction attorney. I commonly see is family members who are living rent-free because Grandma said they could. They don’t want their free ride to end and will often put up a big fuss to delay the process and stay as long as possible. They know the law and often hire a tenant rights attorney to stave of the process. If this is the case you will absolutely need to hire an eviction attorney. If you have tenants in the property, I can help you determine the best plan of action to deal with them. I am a rent control expert and can absolutely give you some great advice and strategies. I have negotiated with many tenants and know how to work out a win-win result with them. I also own rentals and have dealt with tenants for many years. If you do need an eviction attorney I work with several good ones. Give me a call and let’s have a discussion.

Once the property is cleaned out it’s time to do the repairs (unless it is a total rehab project). Most of the work probably consists of landscaping, painting, refinishing hardwood floors, installing carpeting, and minor handyman type repairs to make sure everything is working properly. With most probates we are not doing a complete rehab we are just doing a minor cosmetic fluff. After the repairs are complete I will coordinate with a cleaning company to get the property thoroughly cleaned including windows. I will also get a gardener out to get the lawns and garden looking good and make sure the sprinklers are working properly.

Depending on the situation I sometime recommend rekeying the property. Say you had several family members living there or if a lot of family members have keys it might be prudent to rekey the premises.

If you’ve addressed these issues your property should be ready for the next step, selling the probate property, which I address in Part 2:

Part 2:  The Probate Sales Process

If you have further questions or would just like to have a chat, please give me a call or text at (310) 308-3174 or email me at  I look forward to talking to you, thank you.