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  • Writer's pictureGrimm Realty Group

Top 3 Myths About Selling Probate Property

Updated: Oct 23, 2022

Many personal representatives are tasked with the difficult decision of how to deal with a piece of real estate inside the estate they are managing. There are many things to consider in this process and there are many misunderstandings about selling property as a personal representative. This article is designed to help dispel some of the myths about selling a home as a personal representative. My hope is that this will help you make the decision that is best for the estate, you, and everyone involved.

Selling Probate Property Myths - Traditional Listing & Buyers with an empty house

Myth #1 I have to clean the whole house out before I can sell it.

This myth alone is responsible for needlessly delaying the sale of properties for years and years in many situations. In a traditional sale, where you hire a realtor and list it on the MLS, Buyers expect that the property (house, garage, and yard) will be totally cleaned out on the day of closing. For many of my clients, this can be a pretty big deal. Often, personal representatives are stepping in to help with a house when there have been years and years of accumulation of personal belongings. I have seen the gambit of official and unofficial “collections” of items in clients’ houses. The previous owner of the homes had created a weekly routine: every week she would go to several local libraries and ask for their out-of-circulation books. So every week she would bring 4 or 5 grocery bags full of library books to her house - for 10 years straight. It was a sight to see! She had a stunning collection of College yearbooks starting around the 1890s through the 1930s - piles and piles of them! 😀 So, one house filled up….the second house filled up…the third house filled up, and then they hired me. So there was not only one house but three houses full (floor to ceiling) of books. We found a cash buyer for her (more on this later…). This situation was a good example of how selling traditionally through a realtor just would not have worked because Buyers and mortgage lenders expect houses to be empty before they finance and buy.

But you don’t have to sell traditionally and clean out the house. You can sell to an investor in as-is condition without having to lift a finger to clean out anything. Most investors - certainly myself and those that I work with - assume some or complete cleanout as part of their numbers. They include that figure in their offer. It can be a big relief for the seller knowing they do not have to lift that freezer from 1968 out of the basement or remove the original kitchen cabinets out of the garage.

Myth #2 I have to do repairs first before I sell.

Actually, you don’t! When a Buyer wants to buy a property, they typically need to get mortgage financing. Their mortgage lender will always make sure that the property is worth the purchase price. To do that, they send an appraiser to inspect the property. For a conventional loan, the appraiser checks for basic items, properly updated & functioning mechanicals (plumbing, HVAC, and electrical) and they will check for (generally) good conditions for siding, roof, walls, floors, etc. So, yes for a traditional buyer, cleaning out the property is necessary - the buyer’s lender will not let the transaction go forward if the property does not meet their criteria for property condition or if the appraiser’s opinion of value is lower than the purchase price.

With an FHA buyer, the appraisal will be even more stringent than with a conventional mortgage. There are specific checklists that an FHA appraiser must follow - and the list is long - because they need to confirm that the property conforms to federal guidelines for habitability and safety before they will finance the transaction. This means they go through your house with a fine-tooth comb. If they find a deficiency, it either needs to be corrected/repaired before closing, or the Buyer can back out and the lender will not proceed.

I have seen many transactions fall apart because the condition of the property did not meet the criteria of the Buyer’s mortgage lender. I have seen many more properties that a Seller simply could not sell to a traditional buyer because the property just needed too much work. In these cases, I advise clients to consider selling the property in as-is condition to an investor Buyer.

Myth #3 Listing through a realtor will get more money for the estate.

On the surface, this seems like it might be true. And in some cases, it can be. It always depends on the property itself. In situations where the property needs no work or very little work, this may make sense.

I had a personal representative client a few years ago with a house in Mendota Heights. This was his parents’ house. They had built it in 1956. They had been the only owners. They had polished the kitchen cabinets every year for 50+ years. The roof was updated, the electrical panel had been updated, the furnace was newer, the house was immaculate. The house was virtually empty. In this case, we had no problem listing the property and attracting a buyer. We had a few offers within a couple of days. Because the property was in excellent condition, listing and selling traditionally made a lot of sense.

In other cases where the house is not up to current market conditions, selling the house traditionally through a realtor would not be easier, nor would it necessarily net the client more money.

Let’s compare two scenarios with the same house. Let’s assume the property needs work to be considered at comparable market conditions. Let’s say it needs an updated kitchen, bathrooms, paint, and appliances.

In Scenario 1, the personal representative hires a realtor and waits for a traditional buyer. In Scenario 2, the personal representative sells as-is to an investor.

As you can see, the difference in NET proceeds between these two scenarios is very close. There are many costs associated with listing and selling a property through a realtor. These costs add up. In many cases, selling as-is to an investor can be a better choice for some sellers because it saves on many costs, there are no repairs and no commissions. You can also see above that there are some other things to consider. If you sell as-is to an investor, you will not have to spend the time or money to clean out the house, you will likely only have one or maybe two walk-throughs of the house instead of dozens of strangers walking through.

As you consider which route is best for you, here are some questions for you to ask yourself:

  • How long do I have to get this house sold? [When do I want/need it sold]?

  • What is most important to me in this process? Is it a top-line price? Bottom-line net? Not having to clean out the house? Having it sold and closed as quickly as possible?

  • Do I have time to wait for a possible buyer on the MLS and deal with their inspection repair requests?

  • What is important to me when choosing an investor to work with?

  • What is the reality of the condition of the house in comparison to other similar-style houses that have sold in the neighborhood within the last few months? What would it really take to bring this house up to that standard?

If you take the time to answer these questions thoroughly, you will be well on your way to making the best decision you can about how to go about the selling process.


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The content on this page provides general consumer information. It is not legal advice or regulatory guidance. Grimm & Associates may update this information periodically.

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