Have you ever listed a property after the death of someone listed on the title? For example, a hypothetical person, Mary Jones, recently passed away and Mary’s kids now want to sell the property. What do you do? What are the potential problems?

Who signs the listing agreement?

If you are selling property, you obviously need the owner to sign the listing agreement. Where the owner, Mary, is now deceased, who has the authority to contract with you? Can you just use the personal representative or beneficiaries listed in Mary’s will? Can you use the signature of just one person, or do you need all the parties to sign, for example? What if Mary didn’t have a will? The bad news is that the moment Mary died, her property is now subject to the jurisdiction of the probate court. Nothing happens unless you get a court order.

So here’s the process: If Mary had a will, and named her daughter Sally as the Personal Representative (PR — formerly known as an Executor), Sally needs to prepare and file a petition to admit the will into probate and get herself appointed as the Personal Representative of the estate. After Sally has been appointed, she now can legally act on behalf of the estate and has the proper authority to execute a listing agreement with you.

If Mary died intestate (without a will), the same procedure must be followed, i.e. Sally prepares and files a petition to get herself appointed as the Administrator (same as a PR) of the estate. The only difference is that if Mary died intestate, Sally must be a Nevada resident. Under a will, Sally need not be a Nevada resident to be appointed as the PR of the estate.

How do you know if a given person has the proper authority to execute the listing agreement and legally bind the estate?

Fortunately, this is public record. You can go online at www.clarkcountycourts.us/caselookuplinks.htm and check the court records for the Estate of Mary Jones. If the court has in fact appointed Sally as the PR of the estate, there will be an order indicating such and Letters Testamentary will be issued in Sally’s name. You will want to get a copy of the Letters Testamentary from Sally or from the court for your files.

So you now have a listing agreement executed by Sally on behalf of the estate. So far, so good.

Are there any particulars you need to be aware of in entering into a contract to sell the property?

Oh yes. You can’t just set a closing date whenever the buyer would like to purchase the property and Sally would like to sell it. That would be far too simple and easy. No property can be sold unless and until the court approves a sale. Sound complicated? It is.

You should disclose in your agreement with the buyer that the agreement must be approved by the probate court before the property can be sold. Worse yet, by law, the judge must accept higher offers in open bidding in court. So even if you have a contract for sale with a willing buyer, the buyer cannot be sure that his or her contract will stand. It can be overruled by a higher bid.

What comes next?

After the purchase and sale agreement is executed, you next need to have the PR petition the court for a hearing to approve the sale of the property. Sally’s attorney would typically prepare and file this petition. All interested parties should be notified of the hearing. You should be sure the buyer is notified of the hearing and the fact that the property will be subject to open bidding.

The Probate Commissioner will call the case and ask if there is anyone interested in bidding on the property. He will accept bids in open court. He will enter an order awarding the sale to the highest bidder, which can be the buyer under contract or any third party.

The successful bidder, if different from the buyer on the contract, essentially acquires all rights and duties under the contract, except that it’s a higher purchase price. The new buyer is required to close at the same time and under the same terms and conditions set forth in the contract. If he doesn’t, he’s personally liable and the court can enter a judgment against him.

Finally, the Sale.

After the court approves the contract, the parties can proceed to close as set forth in the contract. Sally will need to provide escrow with a certified copy of the order approving the sale. Finally, Sally as the PR of the estate, will execute and deliver a PR’s Deed conveying title to the buyer.

For all of you brave enough to venture into the world of probate sales, best wishes on a smooth transition through the process and a happy outcome for all!