The Probate Real Estate Basics: How to Sell a Home in Probate
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Alexa Collins, Contributing AuthorClose
Alexa Collins Contributing AuthorAlexa Collins has had her work featured by USA Today, Country Living, House Beautiful, Market Watch, and The San Jose Mercury News. Alexa has written about real estate for 3 years and has interviewed over 100 top real estate agents.
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Taryn Tacher, Senior EditorClose
Taryn Tacher Senior EditorTaryn Tacher is the senior editorial operations manager and senior editor for HomeLight's Resource Centers. With eight years of editorial and operations experience, she previously managed editorial operations at Contently and content partnerships at Conde Nast. Taryn holds a bachelor's from the University of Florida College of Journalism, and she's written for GQ, Teen Vogue, Glamour, Allure, and Variety.
Probate is the process where beneficiaries legally obtain property promised to them in a will and pay off any debts of the estate. If no will is present, then the probate process assigns legal ownership to a close relative of the deceased through a law called the state intestacy law.
In many states, going through the process to probate a will is the only option to legally become the owner of a home. Keep in mind that every state has a different probate law, even though many have adopted the “Uniform Probate Code.”
If you need to sell a house that’s in probate and it’s not required to be sold within probate court, you’ll need to first finish the entire probate process before listing or selling the home. You can, however, speak with a real estate agent to get an accurate idea of the home’s worth. Your agent will also be able to go over any changes or upgrades you’ll need to make to the property, so that you can get a head start before it’s time to put the home on the market.
If the home does not have to be sold in probate court, you’ll need to wait to list until you have power of attorney, which the court will give you.
Work With a Top Probate Agent
Top-performing agents sell homes faster and for more money than average agents. When selling a house in probate, maximizing the home sale can best serve the estate’s interests.
Disclaimer: This article is not a source of legal advice. Please consult a legal professional for legal assistance.
What’s involved in the probate process?
Before the property gets legally transferred to you, you’ll most likely need to go through the probate process.
Generally, probate will go something like this:
1. Find a probate attorney
Contact a probate lawyer to represent you as the will goes through probate. Your attorney will file documents with the court, help collect any money obtained from life insurance, problem solve on income tax issues, and more. They will also be your general advisor throughout the entire probate process.
2. File the will and petition to start the probate process
The process begins when you file the deceased person’s will and a petition for probate in the relevant probate court local to where the deceased lived. This step officially initiates the legal process of probate.
The court reviews the petition and, if everything is in order, formally appoints the executor, or administrator if there’s no will. As the executor or administrator, you will be responsible for managing the estate, including any real estate, during the probate process.
At this point, you’ll also need to let all heirs and beneficiaries listed in the will know that you’re petitioning to begin probate. You’ll provide them the court date of your probate hearing, so that they can present objections, if any.
3. Take inventory of the estate
You must take an inventory of all the deceased person’s assets, including real estate. This often involves getting property appraisals to establish the value of real estate assets as of the date of death, and gathering all important documents, including:
- Estate planning documents: will, burial and funeral arrangements, living will, power of attorney, and advance medical directive
- Assets: stocks, bonds, other properties, cars, deeds, life insurance, bank statements, etc.
- Debt
The inventory and documents required to collect inventory will vary from state to state. Check your state laws and check in with your probate attorney to make sure you collect all proper documentation and that you report it correctly.
4. Notify known creditors and pay legitimate claims
You’ll need to notify all creditors of the deceased and settle any outstanding debts. This might involve selling real estate assets to generate funds.
Once you have identified legitimate creditors (such as credit card companies), you will pay out their claims with money from the estate.
You’ll also use the estate to pay other debts such as personal loans.
5. Manage income tax returns
You’ll also need to file income tax returns for the deceased. This includes paying any inheritance taxes due.
6. Assets are legally transferred to beneficiaries
After all bills and creditors are paid, you’ll petition the court to legally transfer all assets, including any real estate, to the beneficiaries as outlined in the will or, if there’s no will, according to state intestacy laws.
How long does probate take?
The length of probate depends on the estate and the will you have to prove. The presence of a will can make probate a shorter and easier process because everything has already been planned and assets have been assigned to beneficiaries.
How long probate takes also depends on state laws. In some states, if you’re dealing with a small estate, the probate process can take as little as six months. In other states, probate is a lengthy process that can take up to two years.
Check your state laws to make sure you file for probate in time. In Florida, you must file within 10 days of the date of passing, but in Texas, you have up to four years to initiate the probate process. New York has no deadline for filing.
Can you avoid the probate process?
In some states, it’s possible to avoid probate if the deceased has put all assets into a revocable living trust. This trust must be established while the person is alive, and the estate will not have to go through probate after their death.
The other positive associated with a revocable living trust is that you won’t have to worry about selling the house through probate court. This means that you’ll be able to avoid the legal fees that come with selling in probate court. You’ll also have a much more flexible timeline.
What is an intestate probate sale?
If the estate is intestate or does not have a will, usually that estate will have to go through the formal probate process. This means that the court controls the entire sale and bidding process for the home.
Every state has different rules, regulations, and practices for intestate probate sales, but generally they follow the same steps. The executor has the house appraised, gets court approval to sell, and finds a top real estate agent to work with.
Some agents have Certified Probate Real Estate Specialist (CPRES) designations, so they’re knowledgeable about court regulated probate home sales. Look for this certification on an agent’s profile or ask your probate attorney to help you find a real estate agent with this certification.
Once you’ve partnered with an agent, they’ll market and sell the home. Depending on the jurisdiction, this might involve a public auction or a private sale. Timelines for the sale process vary by state as well, but the sale should be completed before probate has been closed.
After you accept an offer, you’ll file a petition with the court to get approval for the sale, and a hearing date will be set, typically 30 to 45 days out. In the meantime, other buyers can step forward and outbid the current buyer.
At the hearing, if there are other interested buyers, the judge will start the bidding process in order to sell the property for the best possible price to benefit the estate and its heirs.
What is a testate probate sale?
In some states, if a will is present, then you can petition the court to sell the home yourself, outside of probate court. In fact, selling a probate property without court involvement is often easier and less expensive because you won’t have to pay court fees, you can go through a traditional home sale process, and you’ll have much more control over everything.
The ability to close the probate process and sell the home without court intervention depends on your state laws, so you’ll need to check in with your probate attorney.
Connect with a Top Agent
Selling a home can be a difficult process under the best of circumstances. Partnering with a top agent experienced in probate can help when selling a home after a death in the family.
When in doubt, ask the experts for help
Probate can be a long and draining process, even if you’re not selling the property. It’s confusing, the laws are very particular, and they vary from state to state. The best help you can give yourself is to connect with experienced professionals to guide you through the entire process.
Header Image Source: (Melinda Gimpel / Unsplash)
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