While unusual, during the home buying process, a home seller may pass away after an offer has been accepted, but before closing. Buyers are understandably shaken by this and may wonder what the next steps will be. Here are insights you can use if you’re ever in the unfortunate situation of having a seller pass away before you have closed on the property. Please keep in mind that the process will vary by state.
What if the seller was married or partnered?
If the deceased seller owned the property with a co-seller as “joint tenants,” then the sale — from a legal perspective — can still be executed as planned. The closing agent will have to record the death certificate of the deceased partner and the surviving partner will sign all the documents at closing.
The REALTOR® of the surviving partner and the buyer’s agent should work together to plan for the most sensitive, effective closing possible. As a buyer, expect that your Realtor will keep you in the know about any delays in closing or other changes to the original listing agreement.
What if the seller had a power of attorney in place?
In some cases, sellers will have a power of attorney (POA), which can broadly transfer financial and property decision rights from the owner (called a principal) to another party. If the home seller is elderly or sick, they may have put a POA in place. Unfortunately, POAs are only valid when the principal is alive.
What if the seller was the sole owner?
If the deceased seller was the sole owner of the home, the estate must be probated. The court will appoint a personal representative, who will have the authority to sign closing documents on behalf of the estate and complete the sale. It takes time, however, to get a personal representative appointed. In addition, the personal representative must wait 30 days (in Minnesota) before executing documents on behalf of the estate. In other words, there is likely to be a delay in the sale. In most cases the sale is completed successfully, but patience is key.
What if there are heirs with rights to the home?
If the seller entered into a valid purchase agreement before they died, the estate is bound to honor the contract, regardless of whether the heirs might otherwise have an expectation to inherit it. The delays in time noted above about the probate process apply, so patience — as always in these situations — is key.
A final word of advice
As a buyer, it may be frustrating that your deal is in the lurch — particularly if you are selling your current residence. This is a great time to practice “The Golden Rule.” Keep in mind that being respectful and offering time to the grieving family and friends is not only the kind thing to do, it may be critical to getting your sale approved. Try to be patient and work with professionals, including legal counsel, to ensure you’re receiving sound advice throughout the process.
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