We are often asked by our clients if their home can be sold while in probate? The overall answer is generally YES, but depending on the status of the will and the names on the title, the process can be quite challenging.
Before we get started, let’s review “What is Probate?” – Probate is the process of proving and registering in the Supreme Court the last will of a deceased person; granting of probate is the first step in the legal process of administering the estate of a deceased person. The probate process must go through a probate court to establish the executor of the estate.
Selling a Home in Probate:
Step 1: Appoint an Executor: The first question to ask following the death of a loved one is who is the executor? Hopefully, your loved one has completed their will and has appointed someone as the executor of their estate. If they have done this, then the process will be much simpler. If they have not done this, you will need to petition to appoint an executor. Depending on the agreement of the heirs, this can be a short or long process.
Step 2: File with the Court: You must file this with the court and allow two weeks while the notice is on public display – following this, the process of the sale can get started.
Step 3: Get an Appraisal. Never put the home on the market without having the appraisal completed first. This step is imperative for the closing process, and is a necessity for the court proceedings. An appraiser can easily be found through a google search or by requesting a referral from your attorney or agent.
Step 4: Market the Home and Accept an Offer. The next step is selling the house. In the case of a probate sale, the offers on the home must meet requirements approved by the court. For example, the home must sell at a minimum of 90% of the appraisal value. Additionally, any offer must be accompanied with a 10% deposit of the total selling price.
Step 5: Notice of Proposed Action. Once a buyer is identified and the home sale is approved by the court, a Notice of Proposed Action must be mailed to the heirs/claimants of the will informing them of the terms of the sale. If anyone objects to the sale, they have 15 days to contest. If no individual contests, the sale may proceed.
Step 6: Finalize the Sale: The last step in the process is the finalization of the sale. When the offer is accepted, the attorney for the estate applies for a court date, which typically occurs 30-45 days later. During this waiting period, the real estate agent continues to market and show the home and is open to new offers. If a higher offer is obtained, the new buyer must submit a cashier’s check equaling 10% of the new price – at this time, they are the new highest bidder.
The court will accept the highest bidder – and once they are identified, escrow will be opened. Escrow during a probate sale generally takes 30-45 days. Finally, the home will close.
Step 6: Allocation of Funds: Once the home is sold, the funds enter into the probate fund. The beneficiaries will receive the profits from the sale; however, funds are not allocated until the end of the probate process. All debts must be paid including taxes, funeral expenses, court fees, etc.
What About Debt?
An in-depth financial analysis of the deceased is necessary to understand if the sale will be as simple as stated above. If the deceased has any debt or taxes due, this must be taken into consideration when selling the home. Upon their death, the executor must notify all creditors – this allows each creditor to make their claim on the assets within the identified time frame.
If you are experiencing difficulty going through the probate process, remember that the process is intact to ensure the assets of the deceased.
For continued assistance, whether you are interested in learning more about the process, understanding if you are in a position to sell, or are ready to let go of the property, we are available to help.
We here at Gulf State Homebuyers specialize in working with clients who have inherited a home; not only do we provide all cash offers with a quick close, but we also have an attorney on staff that can assist. This will both save you money and time.