Are you an executor for the estate of a recently-deceased friend or loved one? If so, you may be unsure about your role and responsibilities. There’s nothing simple about administering another person’s assets—especially when they include property.
Over the years, I’ve received many questions about the process of selling an estate home and have represented many executors and family members with the sale. I can’t provide legal advice; for anyone in this situation who needs guidance, I recommend finding a solicitor you trust. That said, I can offer information about what executors can expect during the selling process in Ontario. Here are some of the key facts you need to know.
Selling an Estate Home: The Basics
As the executor of an estate, you have many duties. From making funeral arrangements for the deceased to resolving their debts and taxes, there’s no shortage of tasks that need to be carried out. But one of the most significant challenges you’ll face will probably be overseeing assets.
What is an Estate Home?
Properties—including primary residences, cottages, and second homes—may be the biggest assets you have to deal with. You must secure all properties, have them appraised, and do what you can to prevent them from declining in value. For each property, here’s what that typically entails:
• Making sure it’s insured
• Maximizing any income from rent (when relevant)
• Selling it for a fair market price
This last point can create friction in some families, especially if one beneficiary is interested in purchasing the property. Unless all beneficiaries agree to sell to them at a lower price, you’ll need to abide by the “fair market price” rule.
Throughout the process, meeting your fiduciary duty should be your number one priority. That means acting in the best interest of all beneficiaries, and treating them fairly and as equals. You’re also obligated to administer the estate in a timely manner (typically defined as one year, though the process is often quicker).
It’s important to note that when selling an estate home in Ontario, you may be held accountable for all assets. Through a process known as “the passing of accounts,” beneficiaries can ask the court to formally review and approve your actions. That’s why it’s so important to maintain records and speak to a lawyer about any points that are unclear to you.
Can You Sell a Property Before Probate is Granted?
One of the trickiest parts of selling an estate home is getting the timing right. In most cases, you’ll need to file for and attain Probate before you can sign any documents confirming the sale.
Simply put, Probate gives you the authority to act as executor. Assuming that the deceased has a Will (and that it names you as executor), attaining it should take approximately 6 to 8 weeks once you’ve filed with the court.
You can list a property before you attain Probate. But if you start the selling process with a buyer, there’s a chance you won’t attain probate before the agreed-upon closing date and the date will need to be extended. Or you can sell conditional on probate but that could exclude many potential buyers.
A buyer may be willing to change the closing date to accommodate the process. Alternatively, you can enter into an escrow agreement, which will allow them to move into the home by the closing date (but they won’t take ownership until Probate is attained).
Whichever route you go, it’s important to be transparent when dealing with potential buyers. Ensuring that they know your timeline at every step can prevent some major headaches on both sides.
Working with the right professionals
Selling an estate home requires commitment and attention to detail. As an executor, you’ll likely run into some areas of confusion during the process. Luckily, consulting with the right experts can help you carry out your duties effectively.
I suggest finding a lawyer who has experience in estate and real estate law. Legally, you can go through the process on your own. But a solicitor with the appropriate expertise will make sure you dot your i’s and cross your t’s. That’s critical, given that your actions may be reviewed during the passing of accounts.
You should also strongly consider your choice of a real estate agent. The right agent will work with you to find a buyer and prepare the property you’re listing to sell for a fair market price. Since agents have been through the selling process many times before, they can also help you deal with complicated timelines.
Achieving the best value for the home is a combination of proper preparation of the home, including staging the home for sale when appropriate, a comprehensive marketing plan and a correct pricing strategy. Selling a family or a loved one’s home can also be a very emotional time and the right person will have sympathy and understanding for your role, a good understanding of the legalities of the sale, as well as working tirelessly on your behalf to make sure that the best outcome is achieved and your responsibility to the estate is fulfilled.
Selling a home as an executor in Ontario isn’t a simple process. But with some good professional advice, you can reduce your stress and efficiently serve the beneficiaries involved.
Need help selling an estate home? I can help ensure that the process is smooth. Get in touch, and we can set up a time to discuss your needs.