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Anyone who combs the real estate listings of New York City for long enough is sure to come across the words “estate sale” eventually. This can be a fascinating segment of the market. It allows buyers to pick up one-of-a-kind apartments you’ll find nowhere else. But what will attract some buyers to estate sales will put others off.
Here’s our guide to making sense of them.
What is an estate sale?What is an estate sale?
The phrase estate sale usually refers to the sale of the contents of a property. However, in New York City, especially among real estate brokers, the term means a property whose original owner has passed away. You can usually spot them on listings describing the property as sold in estate condition. It is a polite way of saying that nothing may have been updated, and it may need renovations.
What are the pros and cons of an estate sale for buyers?What are the pros and cons of an estate sale for buyers?
Depending on how you look at it, estate sales can either be good or bad. Some buyers find it creepy to live in a residence whose former occupant has recently died. Personal effects and their furnishing style will still be in place, making it feel like a mausoleum.
Other buyers find such residences enchanting—a testament to a long and well-lived life. But one thing that scares people about estate sales is their high prices. Sellers may be motivated to sell the property quickly and avoid taxes, but they’re usually not desperate. Some of these properties haven’t been renovated in decades. A low asking price can quickly look less appealing if major renovations like plumbing and electrical wiring are needed.
Estate sales also come with an added layer of complexity. The broker handling the estate sale needs to know the complexities of probate. Adding to that, they’ll need to be able to deal tactfully with still-grieving relatives. It often happens that these transactions involve multiple executors. Not all of them may be in the same state or fully agree on handling the sale. It can sometimes lead to the sale dragging out as emotions become involved and can even lead to the whole deal falling through. All this needs to be considered when dealing with estate sales.
How to handle an estate sale for sellersHow to handle an estate sale for sellers
For an estate sale to move forward, an executor must be appointed. The first step in the process, on the passing of the deceased, is for the family members to take out a death certificate. If a Will has been left, this needs to be presented at the probate court, where its authenticity is determined. Once deemed authentic, the person appointed as the executor of the will shall become responsible for managing the property and executing the plan laid out in the will.
If no will had been left behind, the court would appoint someone as the estate administrator. It’s not a requirement that the executor or administrator be a family member, and you’ll sometimes see lawyers appointed.
Federal and NY estate tax liens on closingFederal and NY estate tax liens on closing
It’s highly recommended that you request and receive a lien from the NYS Department of Finance in advance of closing. This will mean federal and NY estate taxes, or else the buyer could find themselves stuck with paying any estate tax owed.
Why speed is essential with estate salesWhy speed is essential with estate sales
Ideally, an estate sale should be carried out as soon as possible. If done within a year of death, the IRS typically assumes that the sale price is the full market value for the estate tax calculation. If done a year after the death, an appraisal will be ordered to establish the property’s value on death. Something called the date of death appraisal.