Pro Tip: Avoiding A Disaster At Closing

What we are about to go over is so common, and it can completely blow up your closing—which is precisely why we decided to put this information out. Every couple of weeks, we get contacted by a listing agent selling a piece of property. The home’s original owner has passed away, and the owner’s children have inherited the property. For whichever reason, the children decide to sell the house and divide the proceeds. Here is the question that we receive: Who signs the documents?

If the original owner had a legal will or hadn’t done any estate planning at all, the home will pass through probate. The probate process includes:

• Verifying whether there is a valid will
• Allowing creditors to make a claim on the estate
• Paying outstanding debts left behind by the deceased
• Assigning an executor or personal representative to oversee the process and distribute the assets to the beneficiaries after the debts have been paid

The last point is important. Many people are under the impression that the executor is the only one who has to sign at closing when the deceased’s home is being sold. There are very few scenarios where that is sufficient. In North Carolina, if you have only the executor sign the contract, it may not be enough. They may not have full authority to dispose of the property.

The only way to know if the executor has the legal ability to dispose of the property is if the will states that they do. When estate planning attorneys draft wills, they use very specific language to communicate that the property has been given to the executor and that they have the right to sell it. Previously, we mentioned that some people do not have estate plans. This means that they do not have a will. If that is the case, having the personal representative sign will not suffice.

That means that all the heirs and their spouses (if they are married) will need to sign all the documents at closing. Imagine that you are in the process of buying a house and are being told that the executor is going to sign the closing documents. What happens when everyone discovers that the executor doesn’t have the authority to do this? Now, all the heirs and spouses are asked to come in. We have witnessed closings fall apart because some of the heirs did not actually agree to sell. Rather than walking away from the closing table and waiting for your agent to tell you that you are “on record” and the house is yours, you now have a breach of contract.

Thomas & Webber Law at the Lake

We don’t want your closing to go that way, and we will work to prevent it from happening. People can avoid this scenario by having all their heirs and spouses sign the listing agreement. That way, there will be no surprises at closing. At Thomas & Webber Law at the Lake, we work so you can enjoy and even celebrate after your closing. Contact us to schedule a consultation.