Selling a House During Probate

Understanding the Probate Process  

Probate is a way to fairly distribute a deceased person’s estate according to the stipulations in their will. The will is verified, and after any estate debts are paid, family members will receive what the deceased person left to them in the will. Without a will, estate assets may still be distributed through probate.

The Role of the Probate Court in Texas

According to Texas state law, you must go through the probate process to distribute assets left to family members in a will. If the estate’s assets are worth more than $75,000 and the decedent did not make provisions to avoid probate, then the estate must go through probate court.

Informal probate does not require a court hearing and can be used if all parties involved agree to distribute assets according to the will’s provisions. 

The formal process requires court confirmation of the will. It is generally used when the will is contested, the beneficiary is incapacitated, has significant outstanding debts or assets, or the will is missing.

The probate process generally takes 9 months to a year and a half. It may take longer if there are significant issues with the will or if the estate is complex. 

Appointing an Executor or Personal Representative

The estate executor or the personal representative is appointed to manage the estate’s remaining assets and sell any real property, including the house, in probate. They must obtain court approval before starting the probate sale, and the asset distribution will occur under court supervision.

For the formal probate process, estate executors or personal representatives may be family members, or the family may appoint an experienced probate attorney. 

Preparing the House for Sale During Probate 

To start the probate sale process, the executor must get the court’s permission to sell the deceased’s property. They must then have the home appraised, as the home’s sale price must usually be at least 90% of the appraisal price.

Like a traditional home sale, the title must be cleared to sell the property legally. Many individuals will work with a specific probate real estate agent familiar with all legal processes and ensure everything is done according to the court’s stipulations.

With a probate sale, the home is often sold as-is because of probate restrictions around repairs. 

Listing a Probate Property for Sale

Working with an experienced real estate agent who understands the probate home sale process can ease many issues around probate.

To begin a probate sale, you’ll get court approval, then start listing the home on the Multiple Listing Service with help from your real estate agent. You should also schedule open houses to help potential buyers get a feel for the home. Monitor the bidding process and remain attentive to potential buyers’ questions.

If you are the executor, sell the home at its fair market value, as real estate property sold through probate must be in line with market expectations. This requires getting an appraisal beforehand.

Getting Court Approval for the Sale

If going through probate court, you will need approval at each step of the way. You must ensure that the executor has the right to sell the property and that the court approves the sales contract.

According to law, the property must be sold for at least 90% of the appraised value, so it’s crucial to get an appraiser before putting the home up for sale.

The Importance of Property Appraisals During Probate

An appraisal is a critical element of the probate process, as probate real estate must sell for at least 90% of the appraised value. This ensures that the estate’s assets are managed fairly for everyone involved.

Your realtor can help you find a fair appraiser who will provide the documentation necessary to demonstrate the market value.

Legal Considerations and Documentation Required for Probate Sales

When selling a house during probate, you will need to submit various documents to the court to demonstrate that you have satisfied all the will stipulations. This includes the following documentation.

• Letters Testamentary – This shows the estate executor has the right to sell the probate assets.
• Estate Inventory – You must list all personal property and real estate that will be sold.
• Petition to the Court – The executor asks for permission to sell a house under probate.
• Appraisal – This shows that you are selling the home near market value.
• Notice to Interested Parties – You must advertise the sale to ensure that no one contests.
• Title – You will submit the title and show that is not contested, which is crucial both for the court and the person buying probate real estate.
• Sales Contract – This will be submitted to show how much the house is being sold for and who will buy it.
• Notice of Closing Estate – Once the house has been sold, this formally closes the probate process and discharges the executor’s duties.

It’s crucial to work with an experienced probate lawyer who can ensure that the legal process if followed, preventing contestations of the sale and further legal headaches.

Special Considerations for Probate Properties

The probate process is time-consuming, as you must receive court approval throughout. Each step must be meticulously documented, including informing creditors of assets and paying them before sale. 

If there are any disputes about the assets, the court must resolve them before anything can be sold. It must also ensure that every potential creditor was informed of the owner’s death and that all outstanding debts are satisfied.

Challenges and Emotional Considerations During Probate Sales

Losing a loved one is never easy, but working through their will and distributing their assets complicates the grief process, especially if there are many family members involved who all want their fair share. 

The legal processes can be complicated, so working with a probate attorney can help spare loved ones the stress of navigating the court system.

Additional concerns include family members arguing about what they are entitled to under the will and giving up a family home with sentimental value. 

For many people, their deceased family member’s home represents their remaining attachment to that person, and it can be painful to give it up to satisfy debts. 

Handling Debts, Taxes, and Distribution of Proceeds

Before beneficiaries receive anything, all outstanding taxes and debts must be paid first. The remaining funds are then distributed according to the will. For example, if one person is supposed to receive 30% of all assets, they will get whatever remains after debts are paid.

The executor ensures that everything is distributed according to the decedent’s wishes. Some assets, such as bank accounts and life insurance policies, do not need to go through probate and will be distributed according to who is nominated as the beneficiary. 

As such, the executor will review the will and identify the beneficiaries, then determine who is entitled to sale funds after selling the property. If the individual dies without a will, the executor and the family must work together to determine who is entitled to what. 

Probate Fees and Costs You Should Expect

Probate can be expensive. Fees and costs deducted from the proceeds include court costs, executor fees, title searches, attorney fees, and appraisal expenses. 

Commissions for realtors and marketing efforts for the sale will also need to be considered. As with any real estate sale, you must pay closing costs. These can quickly add up and take even more money away from your remaining sale proceeds after settling debts. 

An attorney can help estimate the costs and determine how much of the proceeds will remain after all debts have been satisfied.

Alternatives to Probate: Avoiding the Process

In some cases, it’s possible to prevent probate entirely. One option is joint tenancy, which is when more than one person owns the property. When one person dies, the surviving owner becomes the sole owner. Joint tenants are common for married couples.

Another option is a beneficiary deed or transfer-on-death deed, which automatically transfers the real estate to a beneficiary without probate.

A living trust is set up before death. It transfers ownership of property to a trustee, who is then responsible for managing the estate after death. This trustee may be an attorney who transfers the assets according to the trust’s stipulations after death.

These options allow assets to be distributed quickly after death and help reduce stress for the surviving family members. Families must talk about these issues before a loved one’s death and work with a responsible estate planning attorney. 

Selling to Cash Buyers: A Simplified Option for Probate Sales

For those who want to avoid probate court, selling to a cash buyer can be a good option. A cash buyer will offer a cash offer and complete the process within a few weeks rather than the months that probate requires. You will also not need to perform any repairs, inspections, or appraisals.

This straightforward process reduces family stress, allows loved ones to receive their sale funds faster, and avoids many of the expenses involved with probate.

How A-List Properties Can Help with Probate Sales in Texas?

At A-List Properties, we aim to help you receive the best offer possible on a home with the least hassle. We allow a quick and easy sales process that helps you focus on settling the estate and mourning your loved one.

When you sell to us, you do not need to worry about realtor fees, inspection costs, court expenses, or getting an appraisal. We’ll even make necessary repairs and clean out unwanted belongings. You simply call us for a no-obligation cash offer, allow us to look at the home, then accept our offer and schedule the close. The process can be completed in days or weeks, not months or years.To learn more about the cash buyer process and receive your free quote, call or text us at (972) 526-7042. You can submit your property address and details online for even less hassle. We look forward to helping you settle your loved one’s estate with less stress and more money.