Perhaps the more important detail of this story is that the home was sold in an estate sale by heirs who appear to have let the property go for considerably less than market value.
Inherited property brings with it certain important responsibilities, and that goes double and triple for executors or trustees. The gifted property can be an immense gift and boon to your future. Even if it’s not going to be a home to live in and is just an asset to sell, what a windfall it can be!
There are all sorts of liabilities, insurances, and special transactions that might become important when a piece of real property is at stake. However, foremost at issue for heirs is selling it at the right value. Indeed, responsibility for understanding the real estate market or knowing whom to trust when selling real estate is something an heir takes on.
A possible case of failure to get the value of an inheritance right was brought to light in a recent MarketWatch article titled “This NYC home’s price rose 54% in a week.”
The New York City home in question was inherited and then privately sold. Thereafter, the buyer’s turned around and sold it again – and the market snapped it up at 154% of the sale price given to the heirs.
Perhaps the heirs knew what was going on. On the other hand, perhaps this was a classic case of heirs accidentally lighting up a fire sale in their haste to get rid of an asset. While heirs themselves can lose such a windfall, woe be it to executors or trustees who do not do their due diligence and miss the mark on a profitable sale.
If you are set to inherit a property, it’s a good idea to understand the responsibilities and the factors at play. You don’t need to become a real estate expert just yet, but it is a great idea to know what you’re dealing with. “Know the market before you sell” is a long repeated adage in the real estate market. Take your time.
What if you are planning for your estate now? Do you know the value of the properties you might pass down, and is there something that can be done to teach your heirs about maximizing the value of the property? Communicate your knowledge to your heirs.
Reference: MarketWatch (March 19, 2014) “This NYC home’s price rose 54% in a week”