How do I sell a house?

Factual Questions
1

As I’ve mentioned before, my mother passed away in August. She still owned the house she lived in for most of her marriage, the house that my brother and I grew up in. She didn’t actually LIVE there for the last six months of her life (she lived with her sister because of her medical issues), and toward the end she hadn’t been able to really keep the place up, which when added to her QVC addiction and quasi-hoarder personality, means that clean-out is going to be a nightmare. Plus both my brother and I live at least 180 miles away (and my brother has shown no real interest in doing ANYTHING to clean the house up) and can’t just zip up there every weekend to do some cleaning.

In addition, she no longer actually owned it outright…she’d gotten a reverse mortgage sometime in 2009 (and went through $20,000 of her line of credit from it in less than a year…in addition to at least $25,000 worth of credit card debt).

So, my situation: A house with a serious clutter problem and some service problems (upstairs toilet doesn’t work) AND a long history of DIY wiring and plumbing via my late father (who we used to jokingly call Tim Taylor), a reverse mortgage the lender of which wants the house sold within 6 months of her death (we’re entering Month 2…I only got the notice from them last week despite calling them the day after she died to inform them), and the inability to just go over to the house every night after work to do a bit of cleaning.

Even in the most ideal of situations, I’ve never sold a house before. I haven’t got a clue what’s involved. I know vaguely that you get a real estate agent to do the paperwork and legwork, but I don’t know WHEN you call them…before cleaning out, while cleaning out, only after you’ve cleaned out and the house is ready to be shown? Once the life insurance is distributed, I intend to pay for a cleaning crew, but the initial clearance (packing up the non-garbage for storage or sale, picking out things of sentimental value for family members, etc.) won’t be done for a while.

What’s the usual sequence of events to sell a house that hasn’t actually been lived in for a long time (and hasn’t been lived in WELL for even longer)?

2

Get an agent as soon as possible, since he or she can advise you on things like how to clean up the house and present it for sale.

(ETA: My wife and I plan to sell the house we are living in next year, and we have already been in touch with the agent that we plan to use, long before the house goes on the market.)

3

Thanks…I’ll start looking at agents in my hometown.

I know this series of “How do I…?” threads kind of makes me look like some kind of coma-baby who just woke up after hitting my head when I was 7 or something but my family just doesn’t tend to get rid of stuff before it’s falling to pieces (my previous car was a 1996 Oldsmobile/my mother’s house was bought by my parents in 1971 and lived in by them continuously since/etc.), so I don’t really have much experience getting rid of stuff that isn’t just being junked. I’ve always rented since I moved out of that house, so, again, no experience with home sales.

4

An agent is a good idea. Consider an auctioneer however. Houses at auction generally go for what they are worth (great bargains are uncommon) and you will close on the house much more quickly. Also, the hassles of having to show the house for months and deal with offers is obviated.

5

It sounds like you may also want to speak with someone who arranges estate sales. Sounds like there’s a lot of stuff in the house you don’t want, and an estate sale can be a relatively easy way to liquidate your junk/someone else’s treasure.

6

Depending on the value of the house and the terms of the reverse mortgage, it may be more trouble than it’s worth for you to try to sell it. Talk to a lawyer in the jurisdiction where the house is located, let him review the paperwork on the reverse mortgage–see what your options are. One such option may be to tell the reverse mortgage people that it is their problem now.

7

Wouldn’t walking away from the single largest asset in my mother’s estate get me in trouble as the executor? Especially as there is, as mentioned, about $25,000 in other debt (the house was appraised at $41,000 in 2009, so the reverse mortgage company only has rightful claim to half of the appraised value). Now, obviously, with the lawyer’s fees for handling the filings and such, and what I’m going to end up taking out to reimburse paying for hauling and cleaning and such as administrative costs, all of the other debt isn’t going to be paid off, but my understanding is that it’s my duty to at least attempt to get a fair market price for the estate assets in order to deal with the creditors fairly.

8

It seems like the first thing you have to do is get a hold of the reverse mortgage contract and read it over. I’ve never dealt with a reverse mortgage, but I am under the impression that it’s not just a line of credit, and they may be entitled to more than just what your mother spend.

9

Not sure what state you’re in but if it appraised for $41,000 in 2009 that’s probably the most you can expect to get for it today.
Given the lack of maintenance and sketchy repair history I’d advocate selling it “as is”. Otherwise once a buyer gets in there and does inspections they’ll inevitably come back with a list of requested repairs or credits, further eating into your equity.
Transfer taxes, realtor commissions and other fees can add up to about 7% of the asking price of the house.
Talk to a Realtor who’s handled estate sales.

10

Talk to a REAL ESTATE lawyer. Ask around and get a good one. Then let them recommend what your next step should be.

If it is recommended that you list the house, get at least three names and meet with each agent separately to hear what they have to say.

11

You might want to seriously consider having a weekly yard sale. I know it sounds a hassle, but at least you will get the most out of the stuff in the house without it involving taxes and agents. There might be the possibility that there are “hidden treasures” hidden in the house, either from your mother or your father! Make sure to check shoe boxes, mattresses, suit pockets, and even look for secret compartments. This is the end of the generation of hoarders, and some were quite secretive… Since your brother doesn’t want to help, if you find and sell anything of value, KEEP IT! and keep your mouth shut. Since you’re doing the work for the rest of it, consider the trouble and profits of the weekly yard sales as your commission.

later, Tom.

12

IANAL, but if the estate is underwater, isn’t the best strategy to resign as executor and let the creditors duke it out. Unless you are being paid for doing what you are doing, what is the point ?

13

When my wife’s uncle died, and we helped her mother and sister clean the place out and get it ready to be sold, we fund huge amounts of worthless junk, and hoards of cash stuffed into dozens of little hideaways. His wife, who was confined to a wheelchair, was vaguely aware that he had money stashes, but had no idea where or how much. We’ll never know how much we might have missed.

14

And check your local bylaws regarding garage sales. I believe that in Toronto, for example, a given address is allowed to have no more than two a year.

15

You and your bro need to bite the bullet and put your lives on hold for a few weekends. It sucks, but that’s what happens when people die. Procrastinating longer isn’t going to help and you really should have started the clean out process as soon as your Mom moved out.

If your bro is totally unhelpful, make him sign something saying he waives rights to anything kept from the house and absolves you of anything if you throw out his old little league trophy or something. Then take a couple Fridays and/or Mondays off if you can and just get to work sorting, tossing, hauling to Goodwill, etc.

It will be work, but I bet there will also be some nostalgic feelings and you might find some great stuff.

16

That’s why I said to talk to a local lawyer about possible options. Ideally, you’d want someone who knows about both real estate and probate matters.

17

Wiki on reverse mortgages

You have several options, but if the house value is really around 40,000 (or less) and you have 45,000 in debts outstanding in liens against the estate, there’s not enough money in the deal for you to pay a real restate commission, fix up the house to salable condition, and satisfy all the outstanding debt obligations.

Talk with an estate attorney, but be cautious about how much work you plan on investing in making all this happen. If you are not liable on the mortgage etc. it might make more sense to wash your hands of the transaction (to the extent possible) and let the creditors fight it out. Also talk with a real estate agent just to get your arms around the general real world value of the house.

18

I feel for you. When my mother-in-law died and my wife couldn’t fly across the country to deal with things, my daughter and her boyfriend got stuck with it. They were free, at least, but they also had to deal with my father-in-law.

I can only talk about the mechanics of getting the house cleaned up.
First, it is going to take longer than you think.
Second, go through, perhaps taking pictures, and note anything you want, and give your brother a chance at it also. Take good furniture and other things away with you first thing.

Second, if there is any chance of anything being valuable, get an appraiser in, with the understanding that he or she is not going to be able to buy anything. Just in case. You don’t want that junky picture ending up as the last item on some Antiques Roadshow.

After this, check out estate or other sales, and I agree your real estate agent is a good resource. But don’t expect all that much. I think garage sales would be too labor intensive to be useful considering your distance.

After that, you might want to get a dumpster and start throwing things out.

At this point you can decide which repairs are worth doing. Given everything you’ve said, and the state of the market, my guess is not many. You need to do a cost benefit analysis on each one, and do only those which are going to raise the selling price more than the cost, accounting for your time and overruns.

BTW, my daughter informs us that if and when this happens to us, we’d better hope she or her sister have kids, because there is no way she is going through it again.