Can the Executor of an Estate Sell the Decedent’s Home During the Probate Process?
Real estate is usually the most valuable component of a deceased person’s estate. During the probate process, the executor may sell the house of the Decedent, or a person that has passed. The executor is granted the legal authority to manage the estate’s assets. The Probate Court must formally appoint the executor to have authority over estate assets. If the executor is not local to the property or other assets, the executor may name a Resident Agent to handle certain administrative matters and to sign in the executor’s stead with approval.
The probate process begins with petitioning the court to appoint a personal representative of the estate. If there is a will, the court will issue ‘Letters Testamentary’ to the personal representative. If the decedent died without a will (‘intestate’) then the court will issue ‘Letters of Administration’ to the personal representative. These documents show the personal representative’s authority to manage estate assets. The personal representative should immediately contact the insurer to inform it that the home is no longer owner-occupied to ensure the homeowner's insurance policy remains in force.
Once the personal representative is appointed by the court and notice of the probate is published, a four month notice to creditor period begins to run.
The personal representative may sell the real property during these four months but needs to take certain steps:
Work with an experienced probate attorney and realtor knowledgeable about selling real property during a probate.
Have the real property appraised by a licensed real property appraiser to establish a date of death value. Our team can help assist you with identifying an appraiser and getting this commissioned.
Consider a market analysis to determine an asking price for the real property. We can conduct a home value report immediately to determine a fair market value or provide a broker price opinion.
Obtain court approval to sell the real property.
Ensure that all the beneficiaries are informed and in agreement with the home sale.
The personal representative is exempt from seller disclosures. However, if the personal representative is aware of any issues with the home these should be disclosed to prospective buyers. The personal representative should provide the title company with a copy of the Letters Testamentary or Letters of Administration and the tax identification number for the estate. The personal representative signs the sale documents, including the deed to the third-party purchaser. Any encumbrances on the property, including property taxes and loans, will be satisfied at closing. Once the sale is finalized, the proceeds must be deposited into an estate account. The sale proceeds can be used to pay valid claims against the estate as they arise and the balance is distributed to the beneficiaries after the four-month notice period runs and the court approves a final accounting.
The benefit of selling a home during probate is that only the personal representative needs to sign the sale documents and the net sale proceeds become available to help pay valid claims against the estate. If the home is not sold during probate then the personal representative distributes the home to the beneficiaries via a personal representative’s deed at the end of the probate with prior court approval. If the beneficiaries then wish to sell the home all the beneficiaries must sign the sale documents, which can complicate and/or delay the sale process. This is why we recommend selling during probate if there are many beneficiaries. Getting everyone to agree can complicate matters.
An experienced Probate realtor can help you navigate the property valuation and probate sale process. Contact the probate specialist realtor in the Dallas Fort Worth area, the Modernest Realty Team at (214) 310-1495 to set an appointment to discuss your options.
