Selling any property is a challenging legal process that requires the property owner to consider all the nuances. Moreover, the process can seem even more complicated regarding real estate obtained through inheritance.
Inheritance is the transfer of rights to a property to the new owner, which the individual previously owned via private ownership. After the death of the owner, the property passes to their heirs. However, there are even more questions and unresolved issues when selling houses in probate.
So, can you sell a house during probate?
Let’s take a closer look at this process in this article.
What Does Probate Mean When Selling a Home?
In the United States, the adoption of probate legislation is under the jurisdiction of each state. However, the procedure for probate and the subsequent sale of a home is conducted almost the same way.
Probate is a term used to describe the legislative process that involves taking control of and inheritance of a deceased person’s property. A distinctive feature of the U.S. inheritance system is that the beneficiaries do not directly inherit the property.
After the owner’s death, the heirs automatically acquire the title of new owners, but it does not entitle them to administration rights. However, a probate case can be opened upon application to the Probate Court which determines the will’s validity and appoints or approves a probate administrator for a probate phase.
The advantage of this type of governance is that the beneficiaries obtain the assets after all financial obligations are terminated. In other words, there is no liability to creditors for the heirs, and the personal agent is liable for the legality of the procedure from the beginning to the final stage.
Can You Sell a House During Probate?
If you are asking yourself the question can you sell a house during probate, the answer is definitely yes. It is generally possible to sell a house during probate received as an inheritance.
Yet, it may take some time and effort to regulate all legal processes to prepare the property for sale. Therefore, there are many issues to consider before starting the process of selling a house in probate.
Documents Required for the Probate of a Will
How Much Does a Probate Case Cost?
To inherit property, it is necessary to go through a complicated probate process, which, in addition to the time involved, can be financially costly for the heirs of the property. Most often, the title to the property is established by the court, and the heirs of the property pay all costs during the process.
How Should I Pay for Probate Fees?
The cost of the process depends on factors such as the property’s value, the complexity of the court process, and the laws of the state where the new owner of the property is being executed.
When preparing, you need to consider the expenses such as
1. The Cost of a Probate Attorney
The services of a probate attorney greatly simplify the inheritance process since you do not have to understand all the intricacies and nuances and prepare documents for filing to the court. Moreover, according to the laws of some states, the presence of a lawyer in the process of receiving an inheritance is a prerequisite.
Most often, attorney’s fees are paid from the inheritance. The cost of services is calculated either on an hourly rate or a fixed rate, which is calculated as a percentage of the total amount of the inheritance.
2. Court Costs
The cost of all fees varies from state to state. Still, the main expenses are the filing fee, the appointment of the executor and executor fee, and the cost of all certificates issued by the court.
The price for certificates depends on the number of court-approved documents. You should not overlook this point because these documents must enter into the right of inheritance, insurance companies, tax offices, etc.
3. Property Assessment Fee
If you receive an inheritance through the court and sell the inherited property, you or your representative are obligated to evaluate the property to list it on the real estate market and then sell the property with the distribution of funds among the heirs.
What’s the Difference Between Probate & Selling a House Normally?
Although the sale of any property is a time-consuming process, it is somewhat more complicated in the case of probate property. The main difference between a regular sale of property and the sale of property in probate lies in that the latter option implies court supervision and many additional fees related to the process of inheritance. Moreover, all the actions of the legal representatives are controlled by the court.
While in a conventional home sale transaction, the buyer and seller can negotiate over the value, the heir to the probate estate cannot set the home’s value themselves at the time of the sale because it implies a more significant amount of expenses. Therefore, the property should be sold at the maximum price to cover all the judicially determined costs.
Another point worth considering when selling a house in probate is that potential buyers may only offer to complete the purchase agreement after the property value has been established. An essential requirement is that the buyer is obliged to make an initial payment of at least 10% of the court-ordered cost of the house.
Frequently Asked Questions
How Long Does an Executor Have to Sell a House?
Only an experienced executor can handle such complex business as the sale of probate property. They are fully responsible for developing a detailed plan to sell a home in probate or any other probate property and manage the whole process.
It is essential to know that the process of transferring assets in probate can take from 4 weeks to a year, so it is advisable to file a probate case with the court immediately to avoid any complications or delays.
Who Can Become an Executor?
The right to administer the assets temporarily passes to a personal representative or attorney. This legally authorized party is obligated to convey title to the property to the heirs. The legal representative is referred to as the executor (in the case of a will) or administrator (in the case of inheritance by law or if there is no designation in the will).
The executor is appointed in the will and approved by the court. In contrast, the court usually appoints the administrator and chooses the closest heirs, namely, spouse, children, and parents. In some cases, other individuals of interest, such as creditors, may also be appointed an administrator.
What Are the Main Functions of an Executor?
The executor must collect the deceased’s estate and make arrangements to pay any debts and taxes, including income taxes, owed to the deceased.
The executor acts under a trust created for the benefit of the heirs, who act as beneficiaries. The court constantly monitors the activities of the personal representative, whose primary obligations consist of the following points:
Can the Executor Sell a House That’s in Probate?
The executor has the right to sell a house during probate if there are not enough assets to close all of the previous owner’s debts and legal fees associated with probate. Moreover, in a
difficult financial situation, the court is the official who obligates the executor to put the property up for sale.
After the property is sold and the debts settled out of the home’s value, the residual value from the property sale can be transferred to the beneficiaries of the inheritance
The executor also has the right to sell a house during probate if the will states that there are multiple heirs, and the assets must be distributed to them according to a certain percentage.
Can an Executor Sell a House Without Probate?
The executor must go through a property appraisal process to sell the property. Before the appraisal, they must notify all heirs but can conduct the transaction without approval. An
essential step in selling a house through probate is to estimate the home’s value. The property included in the will must be sold for at least 90% of its market value at the time of sale.
In such situations, the executor contacts a professional real estate appraiser or a real estate agent to avoid personal liability and determine the actual market value. The beneficiaries may keep track of the whole process, and if they want to purchase the property, they can pay the total cost of the house.
Can You Sell a House Without Going Through Probate?
Executors must file complete financial statements related to all transactions from the beginning of the probate to the transfer of funds to the beneficiaries. The beneficiaries will
have access to all the savings accounts after all procedures, such as discharge of obligations and the home sale, have been completed.
Still, there is an exception when the executor services are not needed. This is the case if there is only one heir to the property. In such a situation, the executor can skip the sale of the house and transfer ownership to the heir after deducting all debts.
Can You Empty a House Before Probate?
In general, probate laws are state-dependent. Still, if the court appoints an executor to
administer the will, selling items before probate is forbidden, as the personal representative must include their value in the total inheritance.
Besides, the court will prevent the selling of items before probate to ensure that there is no fraud or that the items are given to a particular person if the will states that they should be distributed to the person indicated in the will.
It is essential to be aware that you may inherit valuable assets and liabilities. For example,
if the house to inherit is in a mortgage, you will need to sign an agreement to extend the mortgage loan with the bank and comply with all the terms, i.e., make the monthly payments. Moreover, the heirs of the property also have to pay all property taxes and settle debts, if any.