Selling your loved one’s house

Probate and selling the house

• Unless the house bypasses probate, it cannot be sold until probate begins, and only the executor or administrator can sell it.

• Common ways of bypassing probate are joint tenancy, transferable-on-death deeds, or revocable living trusts.

• In probate, all those who will inherit the house should agree to sell.

• It is crucial to keep communication open and compassionate so no heir decides to challenge the sale.

After someone you love has passed away, selling their house can be very difficult. It’s often a complex tangle of grief, memories, and logistical decisions—all multiplied by the grief, memories, and opinions of those around you. You may have to contend with family disagreements about the house’s worth, whether to sell, and what to do with the contents. 

Not everyone involved will be following the same path to dealing with their grief, but to sell a home, whether you want to or not, you will all have to deal with each other and your varying emotional and practical needs. It’s best to keep open lines of communication, and approach everyone with compassion and understanding for the ordeal you are all going through together.  

When can you sell the house?

Unless prior arrangements were made for the house to pass to beneficiaries without probate, it has to go through the probate process (with or without a will) and generally cannot be sold before probate begins. Probate determines who is legally entitled to the property, and title companies usually need proof from a probate court that the executor is authorized to sell the house before they will allow any sale to proceed. 

Only the executor or administrator can sell a house during probate. The proceeds become part of the estate and, after all debts are paid, are distributed according to the will, or to state law if there is no will. The beneficiaries who inherit the house can also choose to sell after probate and split the proceeds, or one of them can offer to buy the others out.

The most common way that a house can be legally sold without going through probate is if it was owned in a joint tenancy with a right of survivorship (a common type of ownership between spouses). In order for the surviving owner to sell the house, the recorded title to the property must first be officially transferred to their name.  

Another common estate planning tool that bypasses probate is a transferable-on-death deed, which transfers the house to named beneficiaries. It is not an automatic transfer, however; most states that permit TOD deeds require you to allow a certain amount of time for any challenges to the title. If mortgage payments aren’t fully up to date, the bank can foreclose, nullifying the transfer. And if multiple beneficiaries are named, they all have to agree to the sale. 

If the house was put into a living trust, that trust might hold a number of assets besides the house, and the terms might include instructions for how long a child can keep living there or how much it would cost one beneficiary to buy out the others. Some states also recognize land trusts, which are similar to living trusts but can only hold real estate. 

Preparing the house for sale

Any real estate transaction can be stressful, and this is especially true under such emotional circumstances. When you sell a house that a loved one left behind, there can be a lot of work needed to get the property to a place where it can be sold. You will need to sort through and remove all of the belongings, maintain the physical state and security of the house, and clean and stage it for sale. So you may be dealing with the complicated emotions of grieving your loved one, reminiscing about your experiences in the house, and coming to agreement with the rest of the family at the same time that you’re undertaking a very complex logistical task. 

Unfortunately, making all the necessary decisions and throwing yourself into getting the house ready for sale can prolong your grief and delay your healing process. If you need practical support, in addition to a probate attorney, a real estate agent experienced in after-death sales can help you make important decisions and meet mandatory deadlines. 

Typically there’s a tax benefit to selling an inherited property soon after receiving rights to it, because when a property is inherited after a death, the property is revalued to fair market value at the time of the owner’s death.

Going on the market

Especially when multiple people inherit the house together, the first critical step is getting a realistic appraisal from a real estate agent in the home’s area. You may not be the best judge of how much the house should sell for, especially when emotions are running high. 

If the estate is still in probate, the executor will decide what will happen with the house, based on the appraised value, the estate's debts, and the instructions in the will. If the property doesn't necessarily need to be sold to cover debts, it is a good idea to consult with the beneficiaries who will be inheriting the house to decide whether to sell it during probate and split the proceeds according to the will, or to transfer title to them and leave the decision to them whether to sell it after probate is complete.

In either case, a responsible agent with experience selling inherited homes will verify that the death certificate is on file and that the point of contact has legal authority to sell the house. They will investigate any possible liens on the property, and prepare an accounting of where the proceeds of the sale will go when disbursed. 

If selling during probate, once everyone comes to an agreement to put the house on the market and the terms of any trusts have been fulfilled, the executor should make sure no one is living there and change the locks if they haven't yet been changed, in case there is a dispute. Because the executor is not necessarily one of the beneficiaries, it’s important to keep lines of communication open so that none of the beneficiaries decides to challenge the transaction. 

Before the house is sold, costs associated with the property still must be paid, such as taxes, maintenance, and ongoing repairs. In addition, if the homeowner had a mortgage and that mortgage goes unpaid, the lender can foreclose and seize the property. 

Maintaining the house in good condition is important when it is going on the market. Mourning is not often a good time for major renovations and extensive repairs, however. You can sell it as-is or make minor modifications, such as painting interiors or replacing appliances. The main thing is that the house be empty and clean.

Completing the sale

Once the sale closes, the executor can disburse the proceeds according to the instructions in the will, after any debts are paid off, including any capital gains taxes on the sale itself. Estate or inheritance taxes may also impact how much everyone receives, depending on where the property is, where the beneficiaries live, what their relationship to your loved one was, and how much is being inherited.

Throughout the process, be careful to take care of your own emotional needs. Selling a home, especially if it was your childhood home, can inflame hard feelings or even spark new grief. And the complex logistics of a sale can make it all seem harder, so go at your own pace, and involve professionals whenever possible.

If you can, also keep in mind that the rest of the family is also dealing with the same issues, and they may need to work through them in their own way. Communicate openly and calmly about your options and try to make the decisions that are best for everyone and that most fully honor the wishes of your loved one.

You may be eligible for free bereavement support. Empathy can help with everything from funeral planning to estate administration, with step-by-step guidance and real-time expert support. Many people get free premium access to Empathy as a benefit with their life insurance claim. We partner with New York Life, Guardian Life Insurance Company, Bestow, Lemonade, and other leading carriers. When you make your life insurance claim, talk to your representative about whether Empathy is a benefit they offer.