Selling a House in Probate: A Guide

Understanding Probate

Think of probate as a legal step to make sure the property and other belongings of someone who has passed away are passed on correctly. If the person who passed away owned a house or part of one, that property usually has to go through this process. It can be a bit complicated, so often a lawyer who knows about probate is needed.

This legal procedure is usually needed when a person owned a house by themselves or with others, but not as a ‘joint tenant’. There’s a person called an executor who takes care of the probate process. This person is either chosen in the will of the person who died or appointed by the court. Their job is to list everything the deceased owned, like their house, personal items, and money in the bank.

Probate and Selling a House

Selling a house in probate requires patience and careful adherence to legal procedures. Here’s a simplified overview to help you probate better:

• Consult a Probate Attorney: First and foremost, it’s wise to consult a probate attorney. Selling a house in probate is more complex than a regular real estate sale.
• Understanding the Timing: Knowing when you can market and sell the house during probate is important.
• Exchanging Contracts: While you can agree to sell the house (exchange contracts) before getting the grant of probate, it’s risky. The grant can take months to obtain, and without it, you can’t finalize the sale. It’s advisable to wait for the grant before making any firm commitments.
• The Role of an Administrator: If you’re an administrator (not an executor), your authority comes from something called ‘letters of administration’. You should wait for this grant before marketing the property. While you might be able to start marketing earlier, both agents and buyers need to know about the absence of the grant. Remember, you can’t finalize (exchange contracts or complete) the sale without this grant.

Can you sell a house before Probate?

Typically, you cannot sell a house before obtaining probate. The reason is that the person responsible for the estate (the Personal Representative or PR) doesn’t legally have the authority to sell the property without probate. Trying to sell it before this can lead to legal issues and potential liabilities for this PR.

Exceptions to the Rule: There are a few exceptions. If the property was jointly owned with a surviving spouse or partner, they might be able to sell it without going through probate. Also, if the deceased had placed the property in a trust, the trustee might have the authority to sell without probate.

8 Key Stages to Selling a House When Dealing with Probate

Take look at this step-by-step guide to make probate sale easier to understand:

1. Figure Out What the Estate is Worth: Start by adding up the value of the deceased’s property, savings, and other belongings. This is needed before you can move forward with probate.
2. Handle Inheritance Tax: Check if you need to pay any tax on the estate. If so, pay it. If not, you’ll still need to report the value of the estate.
3. Get the Probate Grant: After sorting out the estate’s value and taxes, you can get a document called a Grant of Probate. This gives you the right to handle the estate, including selling the house.
4. Get the House Ready for Sale: Fix up the house a bit to make it more appealing to buyers. On the other hand, if you sell with We Buy Houses, we’ll buy your home as-is, no need to repair or clean anything.
5. Put the House on the Market: List the house for sale, or contact us and get a fast cash offer.
6. Accept a Buyer’s Offer: When someone offers to buy the house, you can say yes on behalf of the estate.
7. Obtain Court Approval: Before the home can be officially sold, the executor must obtain the court’s approval of the sale.
8. Finish the Sale: Once everything is legally sorted, you can complete the sale. The money from the sale goes to the estate and then to the people who inherit it.

Remember, you need to finish the probate steps before you start selling the house. Selling during probate is a bit like a regular house sale, but you’re doing it on behalf of the estate.

Can you market a property before obtaining a grant of probate?

You might wonder if you can start selling a house before all the probate paperwork is finished. Technically, you can begin to show the house to potential buyers before you get the official probate document, known as a grant of representation. If you were named in the will to take care of the estate (an executor), you’re in a slightly better position to do this than if you weren’t named (an administrator). But remember, you can’t actually sell the house until you have the probate grant.

If you choose to start showing the house early, it’s important to let the real estate agent and any interested buyers know that everything depends on getting that probate grant. If there’s a delay in getting it, the sale might have to wait or even be called off. So it goes without saying that most of the time, it’s better to wait until you have the probate grant before you start trying to sell the house. 

Does Probate Cost Anything?

Probate does involve some costs, and they vary depending on the situation.

• Court Costs and Fees: When there’s a valid will, you can expect to pay court costs and fees. These are standard expenses for processing the will through the legal system.
• Costs Without a Will: Things get a bit more complicated (and potentially more costly) if there’s no will, or if someone disagrees with what the will says. The court has to work harder to sort things out, which can mean higher costs.
• Percentage of the Estate: The American Bar Association estimates that these probate and administrative fees can take about 6-10% of the estate’s total value. But remember, this is before any debts or bills of the estate, like funeral costs or taxes, are paid.
• After Deductions:  Once all the estate’s bills are settled, whatever money is left is given out to the family or friends as the will (or state law, if there’s no will) directs.

How Should I Pay for Probate Fees?

Selling estate property is a common way to pay for probate fees. It’s important to follow the legal procedures carefully and consider seeking advice from a probate professional to ensure everything is handled correctly.  Let’s look at some straightforward ways to manage these costs:

• Using Estate Assets: If you’re the executor of an estate and there’s a property that hasn’t been specifically left to someone in the will, you can sell this property to pay for the probate costs. 
• Distribution of Remaining Funds: After all the probate costs and debts are paid, any money left over is given out to the family or friends as per the will.
• Properties in Different States: In these cases, there’s an extra step called ancillary administration to handle probate there too.
• Selling Property During Probate: You can agree to sell the property even if the probate isn’t all finished yet. But remember, the court needs to check and approve everything about the sale, and there are quite a few rules to follow.

Who May Receive Money from a Probate Process?

Navigating through probate, especially after the loss of a loved one, can be a challenging time for anyone. 

Initially, the estate must address its obligations – this means clearing any debts, paying for funeral arrangements, and settling taxes. Once these responsibilities are fulfilled, the focus shifts to the heirs. If your loved one left a will, the remaining assets are then lovingly passed on to the beneficiaries they named. In cases where there’s no will, it falls to state law to decide, usually favoring close family members like spouses and children. 

What Issues Are Involved in a Probate House Sale?

If you’re facing the task of selling in probate, here’s what you need to know in simpler terms:

• Paperwork and Legal Steps: Probate involves a lot of forms and legal procedures, which can take time to complete. This includes waiting for the probate approval, which might delay the sale.
• Upkeep of the House: During the process, the house needs to be maintained, including paying bills and possibly taxes.
• Market Changes: The real estate market can affect the house’s selling price, going up or down.
• Emotional Aspect: There’s no doubt that selling a family home filled with memories can be emotionally challenging.
• Settling Debts: Any debts of the deceased might need to be paid off from the sale proceeds first.
• Location Rules: The probate rules depend on where the house is, not where you or the deceased lived. Different states might have different rules.

Discover the Optimal Solution for Selling Your Probate House! Maximized returns, top-notch service, and an unparalleled selling experience await you.

Going through a probate sale doesn’t have to be a complex or drawn-out process. In We Buy Houses, we recognize the unique challenges you face during this complicated process and are committed to ensuring you receive a fair and competitive offer for your property. Our team is dedicated to providing top-notch service, guiding you through every legal step with ease and understanding.

One of the greatest advantages of working with us is the speed and convenience of our service. We can quickly make a cash offer, allowing you to close the sale much faster than traditional methods. This is especially beneficial during probate when time is very important. With us, you avoid the usual hassles of repairs, renovations, and navigating the uncertainties of the real estate market.

Conclusion

Wrapping up, selling a house in probate can seem like a lot, with all the legal steps and emotional moments. It’s about taking things one step at a time, from sorting out the legal paperwork to taking care of the house until it’s sold. 

If all this feels overwhelming, that’s where We Buy Houses comes in. We’re here to make things easier for you. We can offer a fair price for the house quickly, without worrying about the probate. This way, you can move on with less worry during this tough time. See what our customers have to say in the We Buy Houses cash reviews.

Remember, you’re not alone in this. With a bit of help and the right information, you can get through the probate process just fine.