The question of whether to shortÂ sell a home in probateÂ used to be rare, but now unfortunately it is not. There are estates where the owner dies, owes more than the house is worth, and a decision needs to be made by the Personal Representative (executor) as to what to do.
My opinion, try it. If it is in the best interest of the bank/investor to short sell rather than foreclose they will do it. If it is not, they won't and will take it to foreclosure.
So who benefits if the home is sold as a short sale? Â Well the realtor for sure. Â The commission is paid by the bank.
However, if the attorney's fees are put on the HUD1 statement (the statement saying who is paying for what and who is receiving what money) the bank may pay them. Â Also, the payment to the personal representative can go on the HUD1. This would make it worthwhile for the Personal Representative to try and do the short sale. Â This can be very handy if the representative is a Bank or Professional Fiduciary.Â
The heirs do not get anything out of aÂ short saleÂ so it does not matter to them if the property is foreclosed or sold short, but it does matter to the neighborhood. Â A vacant foreclosed home brings the other homes around it down, while a short sale is cared for by the realtor and even if vacant is not abandoned.
So should you bother?
I think so.
If you have any questions about probate or short sales, please feel free to contact me.
Keller Williams Realty
D.R.E. Â 01191194
Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Trust and Probate Sales