The loss of a loved one can easily be one of the most difficult events in life.
On top of the grief associated with the loss, many families face the stress of managing the deceased person’s estate. And unfortunately, the probate process can be very complicated, and finding the answers to pressing questions can be difficult.
Questions such as, “Can the executor sell the house while it is in probate,” and, “How long does the probate process take?”
We’ve sifted through the most pertinent legal documents to find the answers to these questions and presented them here. If you need to sell a house in probate, keep reading to gain clarity on the situation.
What is Probate?
Probate is the legal process in which ownership of a deceased person’s assets is transferred to the appropriate recipients – usually family members. How the estate is divided among the beneficiaries is generally dictated in the decedent’s will. However, many people pass away without writing a will. In these cases, familial relationships and local probate laws dictate the division of assets.
The transfer of real estate is typically handled in the probate court of the county where the asset is located.
How Does the Probate Process Work?
The probate process can look completely different depending on the size of the decedent’s estate and whether there is a valid will or not.
Probate with Will Involved
Probating an estate that has a will is a much more ideal scenario than if no will was written. When a will is left, the primary purpose of the probate court is to confirm the will’s validity and ensure the estate assets are distributed according to the decedent’s wishes.
Most wills specify who the executor shall be, which is usually a close relative. The executor is responsible for working with the probate court, estate attorney, and all the beneficiaries to ensure the proceedings go smoothly.
Probate Without a Will
People who die without creating a will are said to have died intestate. This causes the probate process to be much more complicated because instead of the distribution being dictated by a will, it is regulated by local intestate succession laws. These laws are typically solely based on family lines, so the court must ensure that every family member that could be an heir is accounted for.
One of the first tasks in the intestate probate process is to appoint an executor. Even though the deceased person did not name one, it is important to have a point of contact throughout the process. The executor for an intestate estate must be approved by the probate court and is usually the surviving spouse or an adult child.
Because of the added complexities, an intestate estate can take much longer to settle than one with a will. An intestate probate process typically takes a mimumum of several months, with larger estates taking even longer.
Can Executor Sell House in Probate?
Intuition would tell you that you must wait until the probate process is complete to sell an inherited house. After all, you don’t own it until the estate is settled.
However, the executor can sell a house in probate.
To sell a house that is still in probate, the executor must submit an application to the probate court. The application must explain the reason for selling, such as for the payment of debts or division amongst heirs.
If you want to sell a house in probate, it is important to follow your state’s probate laws and work with a probate attorney to ensure you follow all the necessary procedures.
How to Sell a House in Probate
If you need to sell your house in probate, it is important to choose the option that is most likely to meet your goals. For some people, the equity in the home they inherit will drastically change their financial situation, so they are focused on squeezing every penny out of it. Other people are so overwhelmed from dealing with family members that they would prefer to sell the house as simply as possible and still get a solid chunk of money.
Work With a Real Estate Agent
If you’re willing to put in the extra time and effort, selling a probate property with a real estate agent will likely net you the most money possible. That’s because most buyers work with a buyer’s agent when they’re serious about buying a house, so getting yours on the MLS will get you the most exposure. On top of that, people looking to buy a home to live in are often willing to pay more than investors.
However, retail buyers typically aren’t keen on major fixer-uppers. Some might be willing to put in a little sweat equity, but significant repairs will likely deter most of them.
If you plan to work with an agent to sell your house in probate, it is important to set the proper expectations upfront and be realistic about who your buyer will be. If the home is in a popular location and only needs minor updates, you’ll likely attract a large crowd of owner-occupants. But if it needs a major overhaul, an investor that is willing to take on a project will probably be your buyer.
Sell Probate House to a Cash Buyer
If you want to sell your probate house fast and want the process to be as simple as possible, selling to a professional cash buyer is likely the best option for you. A cash buyer will meet you at the house, evaluate the property, and give you an offer to buy it shortly after that.
One of the most significant perks of selling a house in probate to a real estate investor is that they are looking specifically for homes that need work. Therefore, they will buy it as-is without you having to make any changes.
Even though an investor has to factor in a renovation budget when they make an offer on a house, they don’t charge any fees and will typically even pay your closing costs. If you feel an investor will be the right buyer for your property, you’ll likely be better off working with them directly instead of listing with a real estate agent and paying their fees.
Another benefit of working with an investor that isn’t talked about as much is that they can work on your timeline. Need to sell in a hurry? That shouldn’t be a problem since they’re paying cash. On the flip side, need some time to go through the personal belongings in the estate property? Since investors don’t buy houses to live in, they can typically give you the time you need. This can help an executor sell property in probate much easier since it can be difficult to predict exactly how long the approval process in the court will take.
Why Sell a House During Probate?
If you are going to sell a house that is still in probate, you will have to get it approved by the probate court. Part of the approval process involves explaining why the property should be sold now.
One of the most compelling reasons for a probate property to be sold quickly is to pay off debts. Just because a borrower passes doesn’t mean the mortgage on the property dissolves. Not every estate has enough liquid cash to cover the mortgage payments, and it may not be practical for the executor to maintain them either.
Another reason to sell a house in probate now instead of waiting until the settlement is that properties tend to deteriorate over time. If the maintenance of the home is deferred during the probate process, it will likely sell for less money at the end than it would at the beginning.
What Happens to Money When Probate House is Sold?
Once you sell a house that is in probate, are the proceeds instantly available for use? Not usually. Unless there are special circumstances, the money from the real estate sale typically stays together with the rest of the estate’s assets and is distributed upon settlement of the estate.
Can Money from the Sale Be Distributed Early?
It is sometimes possible for heirs to request an early distribution. However, they must submit an application and have it approved by the probate court. One factor that affects whether an early distribution is possible is how much debt the estate has.
If the estate has a significant amount of debt and it is unclear how much money will be left over after paying them off, it will likely be difficult to get an early distribution approved. However, if the fair market value of all the estate assets is significantly more than its debt, an early distribution is possible if the executor and probate court approve it. Work with a competent probate attorney to ensure the process is handled appropriately.
Final Thoughts on Selling a House in Probate
It is entirely possible to sell a house that is currently in probate. However, it can be much more complex than a traditional real estate sale. It is essential to work with an experienced probate attorney when navigating the process to ensure everything is done correctly.
It is also important to work with a real estate professional that can help you with the sale of your home. Whether you sell your probate house to a cash buyer or list it with a real estate agent, working with a knowledgeable company will make the process as smooth as possible.
If you need to sell a probate house in Huntsville, AL or any of the surrounding areas, we’re serious about buying it. We will meet with you and work on a plan that works for the entire family. We know the probate process can be complicated, so we keep it as simple as possible with our all cash offers. If there is anything we can do to help you, or if you have questions, never hesitate to contact us!