As the administrator or executor of an estate, you will likely find yourself in a situation where you have to make difficult decisions about assets, especially if the last will or estate plan instructs you to liquidate physical assets and distribute the proceeds among the heirs.
The more valuable an asset is, the more likely it is that people will take issue with the way that you handle or dispose of it. Real estate holdings, in particular, can provoke emotional responses from family members of the deceased and beneficiaries of the estate. Real estate often represents substantial value, both emotionally and physically, for the estate’s beneficiaries.
Making sure that you fulfill your fiduciary duty to the estate when you arrange for the sale of real estate assets can go a long way toward protecting you from future claims of improper estate administration or a violation of your fiduciary duty.
Verify any rules put in place by the testator
Sometimes, because of the emotional value of real estate for family members, the person creating a last will will specifically include a provision that family members should have the right to make an offer on the property before it gets listed on the general real estate market.
If the last will includes offering the right of first refusal to specific people or any of the beneficiaries listed in the document, those people will have the right to make an offer first. Complying with that requirement is important, but so is obtaining a reasonable price for the property.
Figure out the fair market value for the property
In order to get the best price possible for a piece of real estate and thereby maximize its value, which is part of your fiduciary duty to the beneficiaries of the estate, you need to understand what similar properties in the area have sold for recently. Working with real estate professionals can be a fast and efficient way to establish a reasonable value for a real estate holding.
You should not consider offers below the fair market value for the property, especially from people you know or beneficiaries of the estate, unless the last will specifically allows family members to purchase the home for less than fair market value. Anyone making an offer, even with the first right of refusal, should pay a price that reflects the overall value of the property. Failing to secure a reasonable price could open you up to challenges from others.