Wondering if you can SELL AN INHERITED PROPERTY before probate is finalized?

Hi, Brad from ProbateResource.com here. We’re a nationwide real estate solutions company specializing in probate and inheritance properties. We offer cash purchases or connect you with our network of expert real estate agents who understand the unique challenges of selling inherited homes. If you’re ready to explore your options, visit ProbateResource.com and fill out our easy contact form. We’ll gladly discuss your specific situation.

Now, let’s address the burning question: can you sell a house before probate concludes? 

Technically, probate isn’t truly complete until final accounting and tax filings are submitted. However, you absolutely can sell a property during the probate process. In most cases, as soon as you receive your letters testamentary (as executor) or letters of administration (if there’s no will), you have the authority to sell. There are some exceptions involving affidavits of heirship or affidavits of dissent, but we’ll cover those in a separate video.

Selling Inherited Property During Probate: The Process Demystified

During probate, once you receive letters of administration or letters testamentary granting you the power to sell real property (which they typically do explicitly), you’re authorized to sell. This doesn’t mean probate is over, though. Selling the property, distributing funds, paying debts, and dispersing remaining assets to heirs, along with final accounting and tax filings, all still need to happen.

Technically, probate is only complete once the estate is closed, but many people consider it “done” once the house is sold. In reality, that’s often just the halfway point. To streamline the process, we sometimes enter into preliminary agreements with sellers who haven’t yet received their letters. While not legally binding, these agreements demonstrate our commitment and allow us to move quickly once the necessary paperwork is in hand. Full disclosure is crucial, however, and we ensure all parties understand that the sale and closing are contingent on receiving the appropriate letters, as verified by a closing attorney or title company.

The Crucial Role of Probate Letters in Selling Inherited Property: A Cautionary Tale

Title transfer isn’t possible until you have the official court document proving you’re the estate’s legal representative with the authority to sell real property. Once that letter is in hand, you’re cleared to close and sell. We’ve seen people literally go straight from the probate court to the closing table within hours of receiving that stamped document. Until then,though, a sale isn’t possible.

To expedite things, we sometimes sign a contract with the soon-to-be estate representative. Technically, this contract isn’t legally binding, as they lack the authority to enter into it at that point. However, it’s a good faith gesture, a “handshake agreement” indicating our intent to proceed with the sale as soon as possible. This allows us to initiate title work and other preparations, so when those letters arrive, we’re ready to close immediately.

A Real-Life Example

Let me share a quick anecdote. We were recently under contract on a property, with closing scheduled last week. Days before, the title underwriter discovered a technical issue with the probate letters. The way the judge had filled them out didn’t technically grant the administrator the power to sell real property. Without getting into specifics, we had to petition the probate court for the necessary permission to sell.

The administrator had to petition the court for the proper authorization, which should be granted within a couple of weeks. The initial omission was a simple paperwork technicality, and the judge didn’t want to grant full authority until it was rectified. We’re ready to close as soon as we receive that document confirming her power to sell. I’ve assured her that we’re on standby, waiting for her call the moment she receives that letter. My real estate attorney, being an expert in such matters, even helped her fill out the necessary paperwork, as she’s handling the probate process herself.

Since I can’t offer legal advice, my attorney assisted her, explaining the necessary steps and paperwork. She then filed the documents herself with the court clerk, and within a couple of weeks, we expect her to receive the official authorization to sell the property. We’re eager to close the sale as soon as that happens, especially since this particular property is in foreclosure, with an auction date looming on May 7th. However, recording this video in early April 2024 gives us some breathing room.

Worst case scenario, if we get too close to the auction date, we’ll contact the bank. We’ve done this many times before, explaining that we’re simply waiting on the probate letter and are ready to close. Most of the time, they’ll pause the auction. If necessary, we can even pay the reinstatement amount to stop the auction and then get reimbursed at closing.

If you’re going through probate, remember that in most cases, selling the property before receiving the official letters granting you that power is not possible. Technically, you’re not legally allowed to enter a contract beforehand, but many people do as a good faith gesture, understanding that the sale will proceed once the necessary documents are in hand.

These situations are quite common, so just ensure everyone involved is aware of the status of your probate documents. Whether you’re working with an agent or selling directly to an investor, inform them that you haven’t received your letters yet. Most importantly, always have a title company or closing attorney review your probate documents before scheduling a closing. As we experienced recently, the title underwriter might uncover a technical issue that needs to be addressed before closing.

Keep in mind there are alternative methods to bypass probate in some states, like affidavits of heirship or affidavits of dissent. Be sure to check out our other videos for more information on those options.

Let’s Connect

We’ve got an exciting series coming soon featuring probate attorneys from every single U.S. state discussing probate law in their specific jurisdictions. Stay tuned for those informative videos! We’re currently scheduling interviews with these legal experts to share their valuable insights. I know probate law can be dry, but understanding it is crucial for anyone dealing with inherited property.

Thanks for watching this video. If you have a house you’d like to sell, visit probateresource.com (there’s also a link below) and fill out our contact form. A member of our team will reach out to you as soon as possible. Thanks again, I’m Brad with Probateresource.com.