Can You Legally Sell a House in Probate?

If you’ve recently lost a loved one and inherited their assets, you may be wondering if a house can be sold while still in the probate process. 

This is a common question, particularly if the home is in poor condition. The good news is that you absolutely can sell a property that is going through the probate process—it’s just a bit more complicated. 

Let’s explore some of the ins and outs of selling a house in probate so you’ll have a better idea of what your options are and what to expect.

What is Probate?

In most circumstances, when someone passes away and leaves behind a home, it must go through a legal process known as probate. This is true even if there are named beneficiaries or surviving heirs. 

The probate process involves validating the deceased person’s will (if one exists), identifying and inventorying their assets (including real estate), calculating and paying outstanding debts, and distributing the remaining assets to the appropriate parties.

In basic terms, probate exists to ensure that a deceased person’s estate is properly and legally settled.

How Long Does Probate Take?

As with most legal proceedings, probate can be a long and grueling process. The exact duration will depend on how big and complex the estate is, whether there are any disputes amongst surviving family members, and several other factors.

Fortunately, many states limit how long an executor or personal representative can take to complete their duties and settle the estate. For instance, some states require settlement within 12 months of the executor’s appointment date.

Can Probate Be Avoided?

There are a few situations in which probate can be avoided after someone dies. Specifically, a house does not typically have to go through probate if it’s:

Jointly Owned – If the home is owned by more than one person and it’s set up as joint ownership with rights of survivorship, then it automatically goes to the surviving owner.

Held in Trust – The trustee can transfer or sell the property according to the terms of the trust without involving the probate court.

Transfer on Death (TOD) Deed – The owner designates one or more beneficiaries to which the property will automatically transfer upon their death. Also known as “ladybird deeds,” these are only allowed in certain states.

Who Can Sell a House in Probate?

Only certain individuals or entities are allowed to sell assets in probate. These include:

• Executor: Typically named in the will, this person has the authority to sell probate property.
• Administrator: Once appointed by the court, this individual may liquidate estate assets.
• Court: In certain situations, the court may initiate the sale of property within the estate.
• Heirs/Beneficiaries: Individuals who inherit the property may sell under the oversight of the court.

How to Sell a House in Probate

While there may be some nuances based on the state where the property is located, generally speaking, the probate sale process can be broken down into a few basic steps.

Step 1: File a Petition

First, someone must file a petition with the probate court, typically in the county where the property is located. This kicks off the probate process and officially appoints the executor (if there’s a will) or an administrator (if no will exists). 

Step 2: Identify, Inventory, and Appraise Assets

Following approval from the court, the next step is compiling a list of all the estate’s assets. Once this inventory is complete, the assets must then be professionally appraised. In the case of real estate, this process establishes fair market value.

Step 3: Pay Debts and Taxes

Prior to any assets being distributed to surviving heirs or beneficiaries, all outstanding debt owed by the deceased at their time of death must be settled. This includes taxes. 

Step 4: List and Sell the Property

With the court’s approval, the property appraisal completed, and debts settled, the home can officially be listed for sale. There are a few options for this, which we will discuss below. In any case, the sale itself must be approved by the court before it can go through.

One thing to note is that if there is not sufficient cash to satisfy the estate’s debt, the home may need to be sold prior to estate settlement. In other words, steps three and four may be reversed in some cases.

What if the House Has a Mortgage?

If a house is in probate and still has a mortgage, it can still be sold, but the process becomes a bit more complicated. 

For instance, if the property has a traditional mortgage, the executor or personal representative can sell it with the court’s permission. However, the mortgage will need to be paid off before any proceeds are distributed to the heirs or beneficiaries.

If the home has a reverse mortgage, the process is similar, except that there is typically a deadline for how quickly the remaining balance must be paid. This usually necessitates a quick sale. 

What if the House Needs Repairs?

Another frequent problem with inherited property is that it is often in disrepair at the time of the inheritance. This can occur for a number of reasons, but most often, the deceased person was elderly or ill and unable to manage the upkeep of the home.

In any event, if the property you’ve inherited needs repair or renovations, you can still sell it. You’ll have to decide whether it’s worth investing the time and money to bring it up to sellable condition.

Another option that may be more attractive is to sell the property “As Is” to a cash buyer. This can take the hassle out of the process. For instance, at House Buyers of America, we buy houses in any condition, so there’s no need to worry about repairs or renovations.

Options for Selling a House in Probate

There are a few different options for selling a house in probate. Understanding each one will help you make the best decision for your situation.

Hire a Real Estate Agent

The first option is to go the traditional route of hiring a real estate agent and selling the home the same way you would any other property (except for the sale requiring approval from the court). If you choose to go this route, we strongly recommend finding an agent who is experienced with probate sales. 

Engage an Independent Real Estate Investor 

Selling to an independent investor may be a good option if you are looking to save money on real estate agent fees, or avoid having to fix the property up, as these transactions are often done on an “As Is” basis. That said, the process could still be a bit complicated and time consuming—especially if the investor needs to take out a loan to pay for the property.

Work with a Cash Home Buyer

Like real estate investors, cash buyers allow you to save on fees and sell the property “As Is.” However, because they can offer lump-sum payments up front, cash sales are usually handled more quickly, allowing you to settle the estate, sell the property, and walk away with money in your pocket within a short timeframe.