What You Will Read In This Article
Being named executor of an estate is a big responsibility, especially if large assets like a house are involved. You might be interested in liquifying the estate’s assets to pay off creditors, or just to make the process of distribution to beneficiaries easier.
Can an executor sell a house? An executor can sell a house as long as they meet certain criteria. These criteria vary from state to state.
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Tips Executors Need To Follow When Selling Property
The probate process can look a little different for every estate, and the probate laws in every state being different doesn’t help. Below are some general guidelines that will help you navigate the process if you’re planning on selling property owned by the estate.
1. Be Sure to File the Will with the Probate Court
The first step of the probate process is filing the deceased’s will with the probate court, which should happen as soon as possible. Filing the will is the step that begins the probate process.
Each state has different probate laws, but most require filing the will within a specific timeframe, which can be anywhere from ten days to three months after the date of death.
Keep in mind that until the probate process has started and the court officially appoints an executor, the executor has no legal right to do anything with the estate. This is true even if the will names someone as executor, so it’s crucial to complete this first step completed on time.
Dealing with a loved one’s death is a complicated process even without managing paperwork and court appointments, and it’s understandable if you need some time. But make sure that you meet the required deadlines to save yourself more stress in the long run. Failing to file the will with the probate court slows down the process but can have other consequences, too, such as:
- The executor being removed by the court and replaced
- Beneficiaries and creditors who would have benefited from quicker action on the executor’s part suing the executor
It’s important to know that wills need to be filed with the court even for small estates. The purpose of filing the will is to get it on the public record and verify that it’s legally valid.
Filing the will can prevent potential problems later if someone chooses to contest it. Plus, there’s always the possibility that the estate’s assets will go up in value or that you’ll find additional assets, so filing the will in time will keep you in the clear if the estate turns out to be larger than previously thought.
Nothing can happen with the estate until this step is complete, so if you’re planning to sell property, you’ll have to wait until the petition is filed and the executor is appointed.
2. Establish and Follow the Probate Timeline
As mentioned above, the executor must meet all the court’s deadlines imposed to ensure a smooth and speedy probate process.
The probate timeline can vary drastically, depending on several factors:
- What state the probate is filed in
- The size of the estate
- Number of heirs or beneficiaries
- Amount of debt owed by the estate
- Contesting of will
- Tax complications
Relatively simple probate on a small-sized estate will usually take about nine months in probate, with larger or more complicated ones taking years. A simplified explanation of the probate steps is as follows:
File the Will and Probate Petition
Filing the will and probate petition is the step mentioned in the first section, in which the court verifies the will and officially appoints the executor.
Some states may require the executor to post a bond before continuing the process, in case they don’t handle the estate properly.
Each state has different requirements for how the executor must notify creditors, but all states require that it happens.
Anyone who is owed money by the decedent has a certain amount of time to file a claim against the decedent’s estate. This process alone can hold up the probate process for about three to six months.
Gathering and Valuing Assets
The executor must compile a thorough and accurate account of all the decedent’s assets.. Estimating the assets’ value will often involve having property appraised by a professional.
Once the estate’s value is determined, the assets will be used to pay all creditors who have filed valid claims.
If there aren’t enough liquid funds in the estate to pay off all debt, the executor can sell the house or other property to facilitate this.
The estate will also be used to pay the decedent’s taxes for the previous year, plus estate taxes, if applicable.
Distributing the Estate
The estate will be distributed among the beneficiaries only after the estate pays all debt,, and the court approves the petition.
3. See If the Estate Qualifies For a Streamlined Probate
Not all estates have to go through a prolonged probate process, so it might be worth looking into options for a simplified, or summary, probate.
As with everything in dealing with probate laws, every state has different ways of determining what estates qualify for summary probates. All states except for Delaware and Virginia allow summary probates in certain cases.
In general, the three biggest factors that will determine whether or not an estate can go through summary probate are:
- The size or value of the estate
- Whether the beneficiaries are immediate family members
- How agreeable the beneficiaries are to a simplified process
It’s worth noting that even if the deceased had a good number of assets, they might not all get added to the estate’s value. Assets that usually don’t count towards the estate are:
- Jointly owned property or accounts
- Accounts with “payable on death” clauses or named beneficiaries
- Assets held in living trusts
The process of filing a simplified probate petition with the court is much the same as filing a regular probate petition and generally occurs shortly after the death notification when the will is filed at the court.
Summary probates end up costing the executor and beneficiaries much less time, money, and stress in the long run and keep legal fees to a minimum.
Although it can be hard to tell which estates will qualify, it’s worth having a probate lawyer take a look before you file with the court. He or she will be able to advise you whether a simplified petition will be approved, possibly saving you many future headaches.
4. Only List the House After Being Named Executor
If you’re wondering, “can an executor sell a house?” the answer is yes, usually – but not until the court officially appoints them the executor.
Until the probate court officially appoints an executor, nothing can legally happen with any of the estate’s property, including:
- Clearing the house of belongings
- Repairs or renovations on the home
- Signing a listing agreement
- Listing the house for sale
The amount of work that goes into selling a house is another good reason to file the will and probate petition without delay, so the process can get underway as quickly as possible.
On the other hand, some family members might not be emotionally ready for the house to be cleared and sold immediately, so take that into account.
In the meantime, you can start researching local real estate agents with probate experience, who will understand the extra steps, paperwork, and deadlines required when selling a house in probate. Just make sure not to make any agreements until appointed executor.
5. Consider All Home Selling Options
If you’ve decided to sell the house during probate, the process can look a little different depending on the state the probate is happening in, as well as whether you’re an independent executor with full authority or a dependent executor with limited authority.
If the executor has full authority over the estate, the court won’t have to approve the house’s sale and the process will look somewhat like a regular real estate transaction. The court will give the beneficiaries a window of time in which they can contest the sale, though.
If the executor has limited authority, the court will require an appointment to approve the sale. During this appointment, other potential buyers will have the option of bidding, auction-style for the home.
Other selling options while a house is in probate may include:
- The executor buying the house at the appraised value
- Another beneficiary buying the house at the appraised value
Property in probate cannot be sold for under market value to someone known by the executor, as this constitutes fraud.
But if the property is sold at a fair value, which doesn’t lower the value of the estate, and the beneficiaries and court approve of the sale, then there’s usually not a problem.
6. Try to Sell the Home Quickly in the Probate Process
If you’re stressed out about how to sell a house as an executor, you’re not alone. Selling a house under normal circumstances can be overwhelming; nevermind doing so in the middle of probate.
One of the steps an executor can take to minimize the stress is to decide early on in the process whether they’re going to sell the home or not. The house needs to be sold before the probate process closes, so the longer you wait, the less time you’ll have to get it done and finalized in time to make all deadlines.
This is especially important in the case of estates that will require the court’s approval of the sale, or when there are beneficiaries who are likely to raise objections about the sale.
An experienced probate realtor will be able to help simplify and speed up the process for you, but there is a lot that the executor can do to speed the process along, too.
Preparing the House for Sale
As soon as the executor decides to sell the house, the home should be cleaned out. This can be an especially difficult part of the grieving process for loved ones, so keep that in mind.
The belongings in a house are also considered part of the estate, so a decision will have to be made about whether they will be sold in an estate sale or stored somewhere until it’s time to distribute assets to the beneficiaries.
The realtor will be able to advise you whether or not some furniture or decor should remain in the home to “stage” it for sale, but in most cases, it’s best that the house is completely empty. This is especially the case if the furnishings aren’t modern or in the best shape.
It’s a good idea to sell a house in probate quickly to give the executor one less asset to manage, in addition to meeting deadlines and beating the probate’s closure.
7. If Available, Use Estate Assets to Make Necessary Improvements
In addition to deciding how to go about selling a house in probate (to an independent buyer, or to the executor or a beneficiary), the executor will also need to decide whether to sell the house as-is or make repairs and renovations before beginning the process.
Because it’s ideal to sell the home quickly, large scale renovations aren’t usually the best idea for homes in probate. These can take months and will delay the selling process that much more.
How Many Renovations are Necessary?
On the other hand, if a home is in poor condition, basic repairs are often recommended to make the house as easy to sell as possible. There might also be small renovations that can be done that will improve the home’s value considerably. In this case, renovating might be worth considering.
This is another example of where an experienced realtor’s knowledge will come in handy. Realtors are skilled in increasing homes’ curb appeal and overall market value, so the realtor should be able to suggest what improvements will add the most value and take the least amount of time and money.
In addition to considering how much more value a repair or renovation will bring, it’s essential to take into account:
- The time and effort required to find, hire and oversee the professionals who will be doing the work.
- The cost of the repairs or renovations compared to the value of the remaining estate assets.
If the estate has the assets available to make improvements on the home, and the realtor thinks that they’ll add to the home’s value, it’s definitely worth considering. A home in good condition will sell for more and sell more quickly than a house in less-than-stellar shape.
FAQs For Executors Selling Property
“Can an executor sell a house?” is by far one of the most common questions when it comes to settling estates. Below are answers to other common questions executors have about selling property.
How Long Does an Executor Have to Sell a House?
An executor can sell a house belonging to the estate any time during probate, as long as the house is sold before probate closes. Probate will usually take anywhere from eight months to two years, depending on the size and complexity of the estate.
Can an Executor Sell a House Before Probate?
An executor has no authority over an estate’s assets until appointed by the probate court, so they cannot legally sell a house belonging to the estate before the probate has begun.
Can an Executor Sell Property to Themselves?
An executor can sell property to themselves at market value, as long as the other beneficiaries give written consent or the court approves it. An executor cannot sell property to himself at a reduced price.
Can an Executor Sell Property Below Market Value?
An executor is obligated to sell estate property at the highest price possible, but the amount to which the court enforces this depends on the state and whether the executor is independent or dependent. In some states, the property must sell for at least 90% of its appraised value.
What Happens If All Beneficiaries Don’t Agree to Sell?
An executor can sell a house without permission from all the beneficiaries as long as the will doesn’t state otherwise, but the beneficiaries must be notified of the sale. In some cases, the sale must be approved by the court.
How to Avoid Foreclosure in Probate
The easiest way to avoid foreclosure in probate is to continue making mortgage payments using estate funds, loans, or personal funds. If this isn’t possible, contact the lender and see if they will hold off on foreclosure proceedings, and if necessary, have your lawyer seek an injunction to stop the foreclosure.
Dealing with selling a house following the death of a loved one can be challenging both logistically and emotionally. If you’ve been named the executor of a will, know that you can sell a house and other property as needed. Pay attention to all the legal deadlines, and follow the guidance above. The process of selling a house as an executor is often more straightforward than you may think!