For many executors and trustees, selling real estate is the single largest transaction of the entire administration. It is also one of the most visible: beneficiaries will see the price, the timing and the costs, and they may have strong opinions about all three. Before a fiduciary signs a listing agreement, there are questions that deserve clear answers.

This article focuses on the decisions immediately before and during a sale. For a broader view of the full administration, from the first days after a death to final distribution, see The Fiduciary Guide to Probate and Trust Real Estate.

1. Confirm that you have authority to sell

An executor or personal representative typically needs formal appointment by the court before acting, and even then the power to sell real estate may be limited. A successor trustee’s power is defined by the trust document and state law. Before marketing a property, confirm with counsel:

• Whether you have been formally appointed or have documentation of your authority as trustee.
• Whether the will, trust or state law grants the power to sell real property, and on what conditions.
• Whether notice to beneficiaries or other interested parties is required before a sale.
• Whether court approval or confirmation is required, and if so, how that affects the listing, the offer and the closing timeline.
• Whether co-fiduciaries must join in signing.

Some jurisdictions have procedures under which a court must confirm certain estate sales, sometimes with an opportunity for other buyers to overbid at a hearing. Buyers and agents unfamiliar with that process may need it explained, and contracts must be structured accordingly.

2. Confirm title early

Order a preliminary title report before listing, not after accepting an offer. It may reveal liens, judgments, unpaid taxes, easements, boundary issues, or problems in the chain of title, such as a property still titled in the name of a spouse who died years ago. Resolving these takes time, and discovering them in escrow can cost a buyer.

If the property is held through an LLC or partnership, confirm who has authority to act for the entity under its governing documents.

3. Understand two different values

Fiduciaries often need two different kinds of value, and confusing them causes problems.

• Date-of-death value. For estate inventory and tax purposes, property is often valued as of the date of death, supported by a qualified appraisal. Under current federal law, that value generally becomes the income tax basis of inherited property.
• Current market value. What the property is likely to sell for today, in its present condition or after preparation. A comparative market analysis or broker opinion supports pricing and preparation decisions.

If the eventual sale price differs substantially from the date-of-death appraisal, the fiduciary should be able to explain why, such as market changes, condition, or improvements made. The CPA should be involved in understanding the tax implications of any difference.

4. Talk to the CPA before listing

Tax consequences are easier to manage before a sale than after it. Questions for the estate’s CPA may include:

• What is the property’s basis, and what gain or loss would a sale at the expected price produce?
• Should the property be sold by the estate or trust, or distributed to beneficiaries who then sell?
• How does the timing of the sale interact with the estate’s or trust’s tax year and other income?
• Are selling costs and preparation expenses deductible, and against what?
• Are there estate tax filings or valuations that should be completed first?
• If the decedent or any seller is not a U.S. person, are there withholding requirements at closing?

5. Know the carrying cost and the liquidity need

Every month the property is held costs money: mortgage, taxes, insurance, utilities, maintenance and security. Every month also may affect the estate’s ability to pay expenses and make distributions. Calculating the monthly carrying cost and the estate’s cash needs gives the fiduciary a clear frame for timing and preparation decisions. It also helps beneficiaries understand why a quick sale, or a patient one, makes sense.

6. Decide deliberately how much to invest in preparation

The question is not whether the property could be improved, but whether the expected improvement in sale proceeds or marketability justifies the cost, time and risk. Options usually fall along a spectrum:

Obtain contractor bids in writing, compare them, and document why the chosen approach was selected. Consider whether a pre-sale inspection would help identify issues before a buyer does.

7. Handle personal property with care

Homes often contain decades of belongings. Before cleanout, confirm with counsel how personal property passes under the will or trust. Photograph and inventory contents, have valuable items appraised, give beneficiaries an orderly process for requesting items and keep records of what was distributed, sold, donated or discarded. Disputes over belongings can be more emotional than disputes over the house itself.

8. Address occupants

If tenants occupy the property, leases generally remain in effect, and local landlord-tenant laws may limit how and when the property can be vacated or shown. If a family member lives in the property, including a beneficiary, the arrangement should be addressed with counsel before listing. Occupancy affects the buyer pool, the price and the timeline.

9. Choose the listing professional and agreement carefully

Estate and trust sales benefit from a real estate professional who understands fiduciary sales: court procedures where applicable, documentation requirements, communication with beneficiaries and counsel, and buyers who may be wary of probate. Review the listing agreement’s term, commission, marketing plan and any provisions related to court confirmation or overbids with counsel.

10. Evaluate offers on more than price

The highest price is not always the best offer. Consider:

• Financing strength and the buyer’s ability to close
• Contingencies for inspection, appraisal and financing
• Closing timeline relative to the estate’s needs and any court process
• Requested repairs or credits
• Whether the offer accommodates required notices or court confirmation

Keep a record of all offers received and the reasoning behind the one accepted. If the decision is ever questioned, that record demonstrates a prudent process.

11. Be especially careful with related-party buyers

When a beneficiary, a relative or the fiduciary personally wants to buy the property, conflicts of interest arise. Fiduciaries generally owe a duty of loyalty that restricts self-dealing, and sales to insiders may require consent from beneficiaries, court approval or other safeguards under the governing documents and law. Independent valuation, open marketing and full disclosure help, but counsel should guide the process before any commitment is made.

12. Communicate and document

Beneficiaries do not need to approve every decision, unless the documents or law require it, but they benefit from understanding them. A brief written explanation before listing, covering value, preparation plan, pricing strategy and expected timeline, can prevent many disputes. After the sale, the settlement statement and a summary of costs complete the record.

Before you sign the listing agreement

1. Has counsel confirmed my authority, required notices and any court procedure?
2. Has a preliminary title report been reviewed?
3. Do I have a date-of-death valuation and a current market analysis, and can I explain any difference?
4. Has the CPA reviewed the tax consequences of selling now, later or distributing instead?
5. Do I know the monthly carrying cost and the estate’s cash needs?
6. Have I decided, with documented reasons, how much to invest in preparation?
7. Is personal property inventoried and handled according to the plan?
8. Are occupants and any related-party interest addressed?
9. Have beneficiaries been informed of the plan?
10. Is insurance appropriate for the property’s current occupancy through closing?

The fiduciary remains the decision-maker

An executor or trustee does not need to become a real estate expert, but they do need to make informed decisions and be able to explain them. Estate counsel remains responsible for legal advice, the CPA for tax advice and licensed real estate professionals for the transaction. The fiduciary’s job is to make sure each of those perspectives informs the decision before it is made. Treating the property as a fiduciary asset, rather than simply a listing, is what makes that possible.