While it’s not a common occurrence, a home seller may pass away after accepting an offer but before the closing date. Buyers, who are understandably shaken by this, may wonder what steps they should take next — or how it may impact their purchase.
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 seller and the buyer’s agent should work together to plan for a closing that is both sensitive and effective. As a buyer, you should 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 unless the owner took financial planning steps to avoid it. At that point, the court will appoint a personal representative, who will have the authority to sign closing documents and complete the sale on behalf of the estate.
Keep in mind that it takes time 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 most cases the sale can be successfully completed, but buyers should remain patient as the process plays out.
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 will 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.” Being respectful and offering time to the grieving family and friends is not only the kind thing to do, it may also 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. Reach out to Edina Realty or your agent if you need any additional guidance.