Part 4, Successor Trustee Process, Final Steps

 

Brad Bassi, Certified Residential Appraiser

Mobile # (909) 262-3434

Getting prepared if you are a Successor Trustee, Executrix, Executor, Personal Representative or Administrator for a Will   

This is part 4 in a 4-part series

Part 4 Selling the Real Estate Asset(s)

Once you have collected the bids, contacted referrals and have made your decision on the appraiser. You are now ready to select the person to sell the Temecula or Murrieta real estate.

This process should be like finding the appraiser. Ask for referrals from friends, when selling a residential property look for real estate agent signs that are working the area where the property is located. You want to see the same agent with several signs in the community. Ask the neighbors who is working (farming) the area where the home is located. Look at the internet do some google searching. (if you have hired the Temecula Valley appraiser already then ask them for a referral or two as well, if they know the area and they should, they may be able to give you a few leads.)

Have a copy of the Trust, Will or Personal Declaration that shows you as the successor trustee or personal representative so that you can present to the agent(s) that you select, giving you authority to sign for the estate.

Once you find some names, do the same as the appraiser search, interview at least 3 agents, maybe more. Schedule one day and ask each agent to come at different times to walk the property, ask their questions and you get a feel for them. Then have them prepare a CMA (competitive market analysis), this is typically done for free. Make sure they send it to you writing via a PDF. Look over the document they send you and compare it with the others. Where the agents overlap in sales in estimated selling price, should give you a good idea on where the property should be listed for sale.

Remember the appraisal may not agree with the listing price. The appraisal was done on a retrospective basis so the numbers may not agree, in either direction (up or down) depending upon the market at the time of the appraisal and the listing.

Once you have reviewed the pdf emails from the listing agents, figure out which one best suits your needs and that you feel you can trust and work with.  That doesn’t mean you go with the one who says they can sell it for the most money, unless the comparable sale data supports their conclusion. Before you list the property go over the details of the appraisal and the listing price with the accountant, CPA or attorney. Make sure they know what is going on prior to listing the property.

Now get prepared for the ride with the listing and all the craziness that can happen. Sometimes everything goes smoothly and sometimes, buyers can be unusual. Follow your listing agents’ advice and your gut. If something doesn’t feel or seem right, then ask questions. Don’t assume that everyone is on the same page as you.

If you are selling real estate that is not residential, essentially the process is the same with finding a commercial broker, ask your real estate appraiser or bank trust department for agents. Also google search as well for a commercial broker/agent.  Because the commercial side can be complex, make sure that the trust attorney, real estate attorney, tax attorney or CPA is involved in this process giving guidance and assisting with the documents the agent and appraiser will need in completing their analysis.

Remember this isn’t everything that is needed as each situation is different, but hopefully this will answer some questions or may lead you to ask some more questions of the right people to assist with the process.

If you have any questions about the appraisal process, please feel free to contact me at bradbassi@yahoo.com  mobile # 909 262-3434. I will be happy to share information and I will try to guide you in the right direction.

Part 3, Successor Trustee Process, selecting the appraiser

 

Here is Part 3 of the four part series on Estate Appraisals;

Getting prepared if you are a Successor Trustee, Executrix, Executor, or personal representative or administrator for a Will   

If you have any questions about the process, please feel free to contact me at bradbassi@yahoo.com  mobile # 909 262-3434. I will be happy to share information and I will try to guide you in the right direction.

Part 3

Selecting the Appraiser for the Real Estate.

  • For residential home, units 2-4, residential vacant land, manufactured home or condominium, I would recommend hiring a local appraiser. I would suggest a certified residential appraiser, which is the highest licensed level for residential properties. Some appraisers say they cover the area, but where are they located. There are appraisers claiming to cover an area, but they are coming from another County. They may be competent, but I would place more emphasis on a local appraiser if you can find one, if not expand your search is certainly acceptable.
  • Do some google searches for an appraiser in the area, ask some local Real Estate Agents for their suggestions, if the bank has a Trust department get in touch with that group and ask them for a few appraiser references.
  • During the interview, find out how many Estate appraisals they have completed.
  • How long have they been in business, where is their office located, what market area do they cover, and how many appraisals have they completed on the type of property you need appraised. If tract house or condominium I would not be too concerned if the appraiser has been in business for over 10 years. If it is a custom home, residential land, manufactured home or 2 to 4 units, I would ask to verify they have completed a significant number of these type of appraisals. These are what I classify as more complex and you should be careful in your selection of an appraiser for this type of work.
  • Ask them for some references if possible, to verify your thoughts, call those references.
  • Ask them the definition of Market Value they will use. If you don’t give a quick answer to this question, then I would suggest you keep searching. The reason being is the answer is the IRS/U.S. Treasury Regulations for Estate Tax, is the definition of market value. You don’t need the exact code reference, but I see many appraisers working on estate work not referencing the IRS definition of market value and using the Fannie Mae Form for Estate work. That is not a good thing and shows a lack of knowledge on the part of the appraiser.
  • Give them the date of death of the passing of the last spouse or trustee, this will be their effective date of the report. This is what we call a retrospective appraisal report. The effective date and date of the site visit will be different of course, but that is not a problem. The appraiser just needs to identify all of this in their scope of work.
  • Have them send you a written bid via email for your file. Don’t always go with the low bidder, make sure you are comfortable with the appraiser, they seem knowledgeable and that they will take the time to work with you and support your questions and concerns. Once you get the bids make the selection and email them back with your acceptance.
  • Once you have the appraiser set up, schedule the appointment for their site visit and confirm when to expect the appraisal emailed to you via PDF. Get this in writing.
  • Once the report is complete and you have reviewed it to see if it makes sense to you, if not call them and ask questions. Then you can get all the data to the accountant or attorney for their review.
  • If the property is commercial, medical, office, retail strip center and other type of properties, you will need to hire a Certified General Appraiser. Again, same process, go to the internet do some searching, find Commercial Brokers that deal with this type of property and ask them for referrals and go to the Trust department of the bank and ask for referrals. In the world of commercial you may find more niche appraisers, they may only do retail or office or industrial. This is not unusual. The process is the same, but the length of time needed for them to complete their work and the amount of data they will need from you could be lengthy and complex. Also, the commercial appraisals will be significantly more expensive than the residential appraisal. You may need help from others regarding the hiring of an appraiser and the data they will require, don’t be afraid to ask for help from your attorney, accountant or CPA, especially on the commercial properties.
  • Once this is all completed get the details and reports to the accountant and attorney.

Remember this isn’t everything that is needed as each situation is different, but hopefully this will answer some questions or may lead you to ask some more questions of the right people in order, to assist with the process.

If you have any questions about the process, please feel free to contact me at bradbassi@yahoo.com  mobile # 909 262-3434. I will be happy to share information and I will try to guide you in the right direction.

Part 4 of the sequence will be selling the Real Estate

Part 2, Successor Trustee Process, Going through the Items

Getting prepared if you are a Successor Trustee, Executrix, Executor, or personal representative or administrator for a Will   

This is being done in a 4 part series

Part 2  

Going through the belongings and keepsakes, (as a reminder I am not an Attorney, tax account, Tax Attorney or CPA, make sure you go through the process with them, they will give you guidance) can be a tough arduous task, but don’t try to get it done in one day or bounce around from room to room. Set up a game plan as to how to inventory the home and personal property.

Walk through the home (room by room) and take photos and prepare an inventory list of the larger more visible items in the room. Taking photos will be a great time saver, in the digital world of photos now, take multiple photos of each room. Once this first general inventory is complete, now comes the room by room search. Don’t through anything out unless it has been thoroughly searched (see below). Categorize the items but what can be thrown out, items that have a question, items needing an appraisal (antiques, art work, vases, china), and items needing to be designated for a specific beneficiary based on the wishes of the Estate.

If there is art work, vases, collectibles or antiques, you should consider getting appraisals from a personal property appraiser that deals in those types of items. You may need several niche appraisers who specialize in the type of items you must deal with. Don’t take anything for granted when dealing with an estate, sometimes even the simplest item can be something that no one expected may be of value.

After getting the list of the belongings, then refer to the Trust or Will to determine if there is something specific that goes to one of the beneficiaries. If not, then ask the beneficiaries who wants what. Let them negotiate through this process, unless it becomes unruly, then you may have to step in as the referee. If items have been valued, then you may be able to negotiate by value for different items in the home with the beneficiaries that cannot decide on their own. (Don’t give anything away at this point until all the assets have been identified, valued and the report given to either the accountant or attorney for their review.)

Next before you starting throwing things out, make sure to go through each file folder, magazine or book. You will be surprised what you might find. In dealing with my Mom’s estate, she grew up on a farm during the depression. We would find $1 here, $5, $20 in different places (including a coffee can in the trunk of her car), by the time we finished with the scavenger hunt we found enough cash and change to make the scavenger hunt worth the time. Just make sure you inspect each item before it’s in the trash bin. You might also find some important papers or old documents tied to the family that will be a great find for next generations. You just don’t know what people will put away for one reason or another.

Last item, categorize all that was inventoried, along with appraisals (and value) if any received and the items (money or documents) found. Once you get this all together if there is an attorney involved let him/her know. If not, make sure the beneficiaries know about the inventory and the wishes of the Trust or the Will.  Have the beneficiaries be patient, this is time consuming and important. Next step is valuing the Real Estate.

Part 3 will cover ordering an appraisal for the real estate,

Part 4 selling the real estate

 

Remember this isn’t everything that is needed as each situation is different, but hopefully this will answer some questions or may you ask some more questions of the right people to assist with the process.

If you have any questions about the process, please feel free to contact me at bradbassi@yahoo.com  mobile # 909 262-3434. I will be happy to share information and I will try to guide you in the right direction.

Getting Prepared to Start the Estate Process as a Successor Trustee, 11/21/2016

Getting prepared if you are a Successor Trustee, Executrix, Executor, or personal representative or administrator for a Will   

This will be completed in a 4 part series, remember to get with the Accountant, CPA, Trust Attorney or Tax Attorney for specific guidance

Part 1

If a loved one or good friend has passed away, you have the difficult task of mourning and preparing for the estate issues. I would like to present several blog posts to help you think about some things necessary to move the process forward. Most will seem basic, but when dealing with the emotional status of the passing of a loved one or a friend, sometimes the little things can get overlooked.

  1. Find an original signature of the will, trust or personal declaration, and read the document
  2. Contact the original developer of the document if it was an attorney, accountant or friend. Make sure that you get copies of all their notes when the document was developed. Talk with the Accountant and Attorney for guidance on the process and the wishes of the estate.
  3. When at the funeral home planning, if you were told to get 10 copies of the death certificate I would ask for 20, if 20, then 40. You get the gist. The primary reason is that depending upon the complexity of the estate will decide on how many certificates you need. Always order more in the beginning than you think you need, it is much easier to order the higher number now, then finding out once into the process that you are going to need more. It slows down the process, sometimes stopping the process all together until you get the additional certificates. Ordering more now will save time and money in the future.
  4. Also, remember that you have a fiduciary (legal) responsibility to the estate, and the beneficiaries, so make sure that you get a spiral notebook and start taking notes, inventory all the assets and log all your time spent on the estate. In certain circumstances, you are entitled to a reasonable compensation to complete work for the estate, the banks and attorneys do and so can you. But only if you keep a good responsible log and get direction from an attorney or accountant. Also, keep in mind the beneficiaries have no business trying to acquire things from the estate until the estate has been reviewed and all the processes have been completed. Once you are done with your job, then the dissemination of property and assets can begin. But not until then. This is not a nice thing to say, but once assets and money are involved, relatives can begin to act in ways that you have not seen before, so be prepared and be aware.
  5. Get the estate checkbook set up with you authorized to sign for the estate and make sure the bank knows about the death, bring in the certificate of death and the Trust or Will identifying you as the authorized representative. You want to keep a log of all expenses and you want the checks and release of money to come from the estate. Get with the accountant and/or attorney on this item.

 

Part 2 will cover going through the belongings and keepsakes,

Part 3 will cover ordering an appraisal,

Part 4 selling the assets.

The Home Appraisal Process

An Appraisal: the act or process of developing an opinion of value.

Hopefully the following (along with the FAQ page) will help you understand the basics.

Neighborhood streetaerial view

The key items that appraisers are looking for are:

  • Any locational issues, such as backing or fronting to a busy street, freeway, railroad tracks, school or commercial/shopping center,
  • Location to freeways, schools and shopping,
  • Is the market going up, down or sideways,
  • What are the neighborhood market boundaries and why,
  • Size of home, lot size, views, landscaping, in-ground pool or spa or other amenities,
  • Interior quality and condition of home, type of counters, flooring, cabinets, appliances, recent interior or exterior painting, bedroom and bathroom count,
  • Develop a list of all the improvements and features of your home including an approximate time frame (year) the improvements were made. Provide this list to the appraiser when they come to your property it will help you and the appraiser.

The appraiser wasn’t at my house very long, what else do they do?

  • Appraisers typically will spend about 1 hour in research of sales and the subject property. Custom homes or property on acreage research can be up to 2 to 2.5 hours.
  • Spend time driving to and from the office to the site, then drive the comparable sales. In tract homes this may only take 30 minutes to see the sales for custom homes or properties on acreage this can take up to 2 to 3 hours depending upon location.
  • Once back at the office they download the report data, finish the sketch and upload the photos that were taken of the interior and exterior of the home as well as sales.
  • Then they write up the report. This can take from 3 to 10 hours depending upon the complexity of the assignment, the amount of data and the amount of time spent on developing adjustments. Usually most appraisals will take around 8 hours total.

For Lending purposes there is an important factor identified as the Definition of Market Value. The definition includes “The most probable price, which a property should bring in a competitive and open market under all conditions requisite to a fair sale”. The key words are “most probable price”, not highest not lowest but most probable.

Key item if selling your property, listen to your Real Agent. Don’t you set the price, typically when the seller sets the price it sits on the market and doesn’t sell or it won’t appraise if an offer is received.

The other item that most appraisers will do is attempt to bracket the subject property with sales that are larger, smaller, less amenities, more amenities or the same floor plan if in a tract home community. The object is to present to the lender (appraiser’s client), what is going on in the market and provide insight into the market and how the subject fits within its market.

When the appraiser arrives at your home, let them do their job, typically most will want to work alone as they have a method to their site visit. Let them know that you want to talk to them when they are done. Hand them your list of improvements or upgrades and then ask a few questions that you might have.

Questions not to ask the appraiser:

  • What value will my home come it at?
  • How much does my pool or view add?
  • Don’t you think my house is beautiful or the best house in the area, neighborhood or city?

Asking value questions or trying to pin the appraiser down on how great your home is, will typically lead to an uncomfortable response. Appraiser isn’t being rude but they can’t discuss value with you if a lender is involved. If you hired them for a private party appraisal, they probably won’t have an answer for you until they finish their 8 to 10 hours of work. So make sure they have your amenities and let the property stand on its own. Nothing you can do to change that during the appraisal.

I hope the explanation of the Appraisal Process was helpful to you in understanding the appraisers’ role in estimating your property’s value. If you have any questions please email (bradbassi@yahoo.com) or call me at (909) 262-3434.