If a House is in Probate, Can it be Sold?

Selling a house is rarely straightforward, but throwing probate into the mix complicates the situation. Not only are family members grieving the loss of a loved one, but there’s the challenge of sorting through the personal effects and sifting through legal requirements. Among these is the probate process, which oversees distributing property according to the will or intestate laws. You’re likely asking if a house is in probate, can it be sold?

Distributing assets according to the will or probate process seems complex. The good news is selling a house in probate is entirely possible and may even be required. Unpack what to know about probate home sales, property ownership, and the steps involved in selling a house sale during this unique situation.

Understanding Probate and Home Ownership

Before we get into the nuts and bolts, what is probate exactly? Think of it as the legal process that ensures a deceased person’s estate assets, including the property, are appropriately distributed. The local probate court verifies any wills left behind and appoints someone as executor to manage the deceased’s estate.

Identifying all financial assets, including bank accounts, is crucial during the probate process. The executor must prepare an inventory of the decedent’s assets, including bank accounts, property, and investments. They establish the deceased’s debts and determine if the remaining assets can cover those obligations.

It’s important to distinguish between personal and real property during probate. Personal property includes jewelry, furniture, and other movable assets, whereas real property refers to immovable assets like land and buildings. This distinction affects how assets are inventoried and managed during the probate process.

Probate determines how real estate ownership will be transferred. This is especially important if ownership wasn’t automatically transferred (more on that later). The executor or administrator (appointed by the court) determines what course of action to take. If the sale is justified and court-approved, the administrator oversees the sale of the property and allocates the proceeds correctly.

When Does a House Go Through Probate?

Real estate becomes a probate asset by default with a few exemptions. Generally, a house will go through probate if:

• The deceased was the sole owner.
• There’s no clear legal mechanism for transferring ownership outside of probate (e.g., joint ownership, living trusts, or transferrable-upon-death deed).
• The will names beneficiaries but doesn’t skip probate.

If you’re an executor or heir, understand these scenarios before putting the property on the market. A probate house sale involves complexities that differ from typical home sales, requiring adherence to specific legal procedures and often the guidance of a probate attorney.

Who Owns a House During Probate?

During the probate process, real estate ownership technically remains in the deceased person’s name until the legal process concludes. However, the probate court appoints a personal representative to manage the deceased’s estate, including the property. 

This personal representative is responsible for making decisions about the property, such as whether to sell it, but they do so under the court’s supervision. Any ownership transfers cannot occur until the court approves it and the estate settles.

The Role of the Executor in Probate Real Estate

The executor plays a pivotal role in the probate process. As part of their duties, the executor must gather all of the deceased’s assets, pay off any outstanding estate debts, and distribute the remaining estate assets according to the will or state law if no will exists. 

After examining the assets and outstanding debts, the executor may determine that a probate house sale is necessary to raise funds to settle the estate. They do not necessarily need beneficiary consensus to hold an estate sale.

When selling real estate, the executor must first determine the property’s fair market value, usually by hiring a licensed appraiser. The executor uses this information to set the home’s sale price. The executor may also work with real estate agents to list the property for sale, market it, and negotiate with potential buyers. 

Probate sales must follow the legal process set by the state. Usually, this means public advertising for at least 30 days, an open bidding process, and some negotiation. The executor is obligated to set a fair price for the property but must also obtain court approval. That way, the probate court verifies that the sale aligns with the estate’s best interests and its beneficiaries.

Additionally, the executor is responsible for paying off any estate debts and taxes before distributing the sale proceeds to the beneficiaries. 

Who Is Allowed to Manage the Estate Property?

Typically, the personal representative or executor is the individual authorized to manage the estate property during probate. Courts usually favor appointing close family members, but there are situations where they do not. If there is no will or if the named executor is unable to fulfill their duties, the probate court may appoint an administrator to take over the management of the estate. 

Part of their role is to maintain all real estate property by paying taxes, utilities, and mortgage payments.

In some cases, if the appointed administrator is found to be mismanaging the estate, the court has the authority to remove and replace them. Additionally, if another person is listed on the property’s deed alongside the deceased, they may have the authority to manage the real estate.

Can You Sell a House Without Probate?

The big question lots of heirs have is, “Can I sell my deceased parents’ house without probate?” The short answer is…maybe. It is always advisable to consult an experienced probate attorney to confirm the situation. You might avoid probate altogether when:

1. Joint Ownership with Rights of Survivorship

If multiple individuals co-owned the property with “rights of survivorship,” ownership automatically transfers to the surviving owner without probate. This is typically the case for living spouses.

2. Transfer-on-Death (TOD) Deeds

Some states allow a TOD deed, meaning the property transfers directly to beneficiaries when the owner passes away. Again, no probate required.

3. Living Trusts

If the property was part of the deceased’s living trust, it bypasses probate and can be directly transferred or sold.

Steps to Determine Probate Necessity:

• Check how the property was owned (e.g., sole vs. joint ownership).
• Search for transfer-on-death deeds or trust documents.
• Consider consulting probate attorneys for experienced legal guidance to negotiate the complex probate process. Their oversight ensures proper management and distribution of real property to heirs.

If no exceptions apply, you must proceed with probate court before selling the house.

Steps to Selling Probate Property

If probate is required, don’t worry—we’re here to simplify the maze of legal requirements, including obtaining the court’s approval. However, each state has its nuances on how to sell property under probate. 

Generally speaking, selling a home in probate goes as follows:

How Probate Sales Work:

1. Start Probate Proceedings. File necessary documents with the probate court to start legal proceedings to appoint you (or someone else) as executor/administrator. If you are named in the will, file this with the court.
2. Gain Approval For a Probate Sale. Get necessary permissions from heirs or beneficiaries if required. The court often needs to approve the property sale, especially if disagreements arise among heirs or if there’s no clear directive in the will. Executors must provide detailed information about the property’s value and intended sale.
3. Appraise the Property. By law, many states require the house to be appraised to determine its fair market value.
4. Market and Sell the Property: You must follow legal requirements and processes to sell estate property. Some states have specific property listing rules (e.g., labeling it as a “probate listing”). Hire an experienced real estate agent to help list the home. 
5. Select an Offer. Probate sales can have multiple offers. Choose buyers who understand the unique requirements of a probate property. Accept a suitable offer and prepare for potential confirmation court hearings (if required by state law).
6. Finalize the Sale: The closing can move forward once the court approves the offer. Attend closing and distribute the funds as directed by the will or court. File final paperwork.

Keep in Mind:

Probate laws vary by state. For example, California’s process for probate sales differs significantly from Texas. Save you a headache or two and hire an experienced probate lawyer in your local jurisdiction.

Challenges of Probate Real Estate Sales

Selling a house already comes with its fair share of challenges. Probate sales add an extra layer of complexity. The most common hurdles the executors face are:

• Potential Delays: Depending on schedules, probate court timelines can stretch from months to over a year.
• Heir Disputes: Family disagreements over the sale or distribution of funds can delay the process and settling of a probate estate.
• Financial & Tax Considerations: Executors must account for maintaining the probate property while waiting for court approval, court costs, the potential taxes on the estate or sale proceeds, and settling with creditors.

Preparation and professional guidance can help mitigate many of these challenges.

Alternatives to Selling During Probate

Selling isn’t the only option when deciding what to do with the deceased’s remaining assets. Depending on your circumstances, consider these alternatives:

• Transferring Ownership to Heirs: Allow beneficiaries to take ownership directly and decide what to do with the property.
• Renting the Property: If selling doesn’t feel right, renting out the house can generate income while keeping it in the family.
• Probate Loans/Advances: These inheritance loans can offer short-term financial relief if you need immediate funds (e.g., for taxes or debt payments). Heirs benefit from cash now while the estate works through the entire probate process.

Always weigh the pros and cons of selling versus keeping the property.

Final Thoughts on Selling a House During Probate

Armed with the right knowledge, probate real estate sales are absolutely manageable. Remember these key points:

• Understand probate laws and exceptions to selling a house without probate court approval.
• Work closely with probate lawyers and experienced real estate agents to avoid hiccups.
• Be patient and communicative, especially when multiple heirs or legal obstacles are involved.

Ultimately, handling probate doesn’t have to be a solo effort. When in doubt, seek legal guidance to ensure a smooth and straightforward process. Probate sales may be complex, but with the right team, you’ll turn complicated into completed in no time.