Selling Inherited Property In Texas
When parents pass away, it can be difficult for family members to grieve and handle the necessary affairs. The decedant’s estate and personal possessions must be sorted out and distributed to the designated inheritors. Oftentimes, when someone dies, their personal holdings are handled through probate. The personal representative of an estate will need to manage the inheritance, including any assets, debts, and taxes, to ensure that all obligations are met.
Sometimes, when a person dies without leaving a testament or making plans for their property, transferring their assets can be difficult. Selling an inherited house in TX while probate is in effect can be a time-consuming, costly process that can feel overwhelming. Our guide to getting through probate can help you move forward.
Table Of Contents
- Probate Sale Meaning Texas
- Probate Process for Selling Real Estate in Texas
- When Can the Executor Sell the Probate Property in Texas?
- Can You Sell a House Before Probate Is Complete in Texas?
- Do You Need to Go Through Probate to Sell an Inherited House in House?
- Texas Probate House Sale Issues
- Options You Can Consider When Selling a Probate House in Texas
- Listing the Probate Property with a Texas Real Estate Agent
- Selling the Inherited Property to a Family Member in Texas
- Selling a Texas Probate House As-Is to a Cash Home Buyer
- Texas Probate House Sale Frequently Asked Questions
What Is a TX Probate Sale?
Probate is a court-facilitated process that legally acknowledges a person’s death so that their estate and its assets can be transferred and distributed to living inheritors. When a Texan passes away, the law requires that their property be sold in a TX probate court. The court schedules a hearing, validates the will of the decedent, and appoints an executor, also called an administrator, steward, or personal representative, to facilitate the sale of the home. Once the sale is complete, the court splits the proceeds among the beneficiaries and eventually finalizes probate.
What Is the Probate Process for Selling Real Estate in TX?
The probate procedure begins when an inheritor or authorized petitioner registers the property owner’s death certificate and identifies a will with the office of the County Clerk where the decedent resided. The court then schedules a probate hearing to take place at least two weeks after the petition is filed. Two weeks before the proceeding, the court notifies the public about the probate application by posting information online and at the courthouse so that anyone can contest the testament or make a claim against the estate.
At the hearing, a probate judge validates the testament and approves an independent executor named therein to take charge and act on behalf of the estate. If there are multiple inheritors, the court typically appoints a single administrator to handle affairs. If the title and deed to the property are available, the judge may transfer these documents to the rightful inheritors and verify that the descendant’s names are properly recorded.
If there is no testament, a court-appointed attorney determines the inheritors of the estate. The court then designates the closest relative or a petitioner to be the administrator or personal representative of the intestate estate. If the named steward is unable to fulfill their duties, the court appoints a new administrator. After probate is initiated, the hearing ends, and the house can be marketed to buyers.
Preparing to Sell the House During Probate
Selling a home in probate can be a costly process that involves several steps, including those listed below.
Open a Bank Account
Once probate is granted, the administrator needs to open an estate bank account to temporarily store and manage the decedent’s personal assets, including proceeds from the sale of the home. Funds in the account can be used to pay any expenses or financial obligations of the deceased.
Transfer and Verify the Title
If the title has not yet been verified, the steward should hire a specialty company to transfer the document to the inheritors. The property will be subject to taxation, so the steward must register any new, listed names on the district tax rolls.
Secure a Professional Appraisal
After the initial hearing, the steward has 90 days to secure an appraisal and deliver an inventory, appraisal, and list of claims to the county clerk. An independent, professional appraisal is generally required to determine the value of the estate, including the house and its contents such as jewelry, antiques, vehicles, and other valuables and personal belongings. When the estate is large, complex, or worth more than $1 million, the steward should speak to an attorney to avoid legal risk.
Deliver the Appraisal to Court for Approval
Once the appraisal is in hand, the administrator must have the document approved by the court.
The steward is required to pay off any liabilities and outstanding debts, including property taxes, capital gains tax, inheritance tax, income tax, mortgage payments, liens, judgments, homeowner’s insurance, home equity payments, utilities, and home owners’ association fees.
Pay Outstanding Bills
The steward must also pay any outstanding medical and funeral expenses the decedant incurred as they passed on.
Distribute the Inheritance to Heirs
Once all relevant financial obligations are settled, the administrator distributes any contents, personal possessions, and heirlooms in the house in accordance with the terms of the testament.
Sell, Donate, or Dispose of All Remaining Possessions
If the estate is intestate, the seller should divide property and valuables amongst the heirs and sell the remaining items at an auction or estate sale. Any unwanted personal possessions can be donated to charity or discarded.
Make Needed Repairs and Home Improvements
To increase the sale price of the house, the seller may deep clean, repair, make improvements, and care for the lawn using money in the estate account.
Secure a Grant of Probate and List the House for Sale
When probate is granted, the administrator can list the house for sale.
Options to Consider When Selling a Probate House in TX
When it’s time to sell an inherited house under probate in [market state], sellers have a few options.
List the Probate House With a TX Real Estate Agent
A good realtor can help a seller get a higher price for an inherited home by using a multiple listing service (MLS) database to make the property available to a large pool of buyers. A qualified real estate agent knows how to price the house, list it, and market it. They can also suggest repairs, stage the house for photos and open houses, negotiate offers, and provide assistance throughout the selling process.
Selling a house with a realtor can be more time- and resource-intensive than other kinds of property sales. The seller must pay the realtor’s commission and may be subject to additional associated costs and fees.
Selling The Inherited Property To A Family Member in TX
If all family members are in agreement about the property sale, selling an inherited house to a family member during probate can be a way to speed up the process. Retaining the home for sentimental value while providing other heirs with cash proceeds can be a win-win solution for all inheritors. It may also be faster and easier to sell a house to a family member than it would be to sell it to a stranger.
If there are disputes within the family about the distribution of the decedent’s personal property, selling it to a family member while probate is underway could generate lasting bad feelings. A dispute could cost all interested parties time and money, especially if attorneys get involved in the mediation process.
Sell as “For Sale By Owner” (FSBO)
An administrator who chooses to sell an inherited house for sale by owner has complete control of the home sale process. FSBO can be a good option if the seller has a buyer lined up or knows exactly how to market the house, price it, and negotiate the sale. Sellers who choose FSBO won’t have to pay a listing agent’s commission, which is typically between 5 and 6% of the sale price.
For sale by owner (FSBO) is a challenging process that can often be slow and less lucrative than selling by other methods. A seller must be comfortable dealing with disclosures, negotiations, and escrow. The seller may also have to pay the buyer’s 2-3% agent commission.
Selling a TX Probate House to a Cash Home Buyer
A seller can work directly with a property investor or house-buying company that helps sellers cash out quickly and includes closing costs in the probate sale. These companies buy the house as-is, which means that sellers can free themselves from the cost and hassle of repairs, staging, and showings. A cash buyer can make the sales process less resource-intensive and emotionally draining.
Prepare for the Probate Sale Hearing
When the seller accepts an offer for the house, they mail a formal Notice of Proposed Action to all beneficiaries of the estate. This notice includes a statement of the terms of sale, which inheritors have 15 days to contest.
If there are no objections, the sale may proceed. With some exceptions, the court schedules a hearing 30-45 days after the executor files a petition to finalize the sale. During this time, the seller can try to get a better offer for the house. This probate hearing is like a public auction, so anyone who attends can attempt to outbid the accepted offer, as long as that bid is at least 5% higher plus $500. All offers must be backed by a 10% deposit. When the probate judge receives the highest valid bid and the final sale price is at least 90% of the property’s appraised value, the court must accept the corresponding bid. The buyer must pay the seller 10% of the purchase price and sign the contract at the hearing. Escrow begins, and the sale closes 30-45 days later.
The Court Can Halt a Probate Sale
When an estate goes through probate in TX, it is ownerless until the court releases the estate to the beneficiaries. While probate is in effect, outstanding liabilities must be settled before inheritors can receive assets. If the estate cannot pay debts outright, the probate court may conclude that the estate must sell the home to pay creditors. The heirs would then receive any remaining proceeds.
When Can The Executor Sell The Probate House in TX?
An administrator can sell the house when probate is granted. It typically takes two to twelve weeks to secure letters testamentary or letters of administration, which grant the seller power over the estate and the right to sell the house. Urgent cases may receive a grant of probate in two weeks. Non-taxable estates may receive the proper documents in six weeks, while estates subject to inheritance tax may need 12 weeks to secure a grant.
Can a House Sell Before Probate is Complete in TX?
A seller can accept an offer for an inherited house in TX before probate is finalized. Proceeds from the sale go into an escrow account. Once all outstanding liabilities have been accounted for, beneficiaries may receive the proceeds. If the decedent accrued a considerable amount of debt, the probate court may need to approve the sale.
Do you need to go through probate to sell an inherited house in TX?
Retained Life Estate and Lady Bird Deeds
Careful estate planning may enable inheritors to circumvent probate and sell an inherited house. If the decedent drew up an enhanced retained life estate, or “Lady Bird” deed, named the inheritors before dying, paid all bills, and made the proper arrangements, the inheritors can file an affidavit reflecting this information to transfer the title.
Probate can be expedited using a muniment when a court uses a valid written testament and witness testimony for the sole purpose of establishing title to personal and real property. Muniment does not provide for the administration of the estate, and no administrator or personal representative is required. To qualify for a muniment, all outstanding financial obligations, except liens against real property, must be paid and supported with the proper documentation.
Affidavit of Heirship
Sellers who want to avoid the probate procedure may only need to provide notarized affidavits of heirship to complete the sale of an inherited house. These estate affidavits establish the ownership of the inheritance and provide access to funds in bank accounts and investments. They are easy to process if all beneficiaries agree about the disbursement arrangements for the property and secure two witnesses to sign the affidavit.
Revocable Living Trust
A trust allows a third party, known as a trustee, to hold assets for one or more beneficiaries. If the decedent placed a house in a revocable living trust before they passed away, the inheritors can avoid probate.
TX Probate House Sale Issues
Probate can be complicated by family disputes if a testament is unclear or contentious. If several parties, including beneficiaries and creditors, lay claim to an estate in the absence of a testament, a probate attorney must be hired to represent the estate and resolve the conflict. To settle such issues, the testament must be validated in a probate court.
Coercion of the Decedent
If an inheritor believes that the decedant was coerced into rewriting a testament, they may attempt to convince a judge to declare the testament invalid.
Outstanding liabilities may delay the probate process, the sale of an inherited house, and the distribution of proceeds and personal possessions to inheritors.
Probate House Sale Frequently Asked Questions
Can a House Be Sold Without Going Through Probate in TX?
In TX, it may be possible for a seller to circumvent probate and sell an inherited house with careful planning. Retained life estate and Lady Bird deeds, muniments, affidavits of heirship, and revocable living trusts are among the specific tools owners and beneficiaries can use to avoid probate.
Can a House Be Occupied While Probate Is Pending?
A person or people, such as a surviving spouse or siblings, can live in the decedent’s house while probate is in effect as long as they follow the terms of the testament or the arrangement is allowable by law. The occupant may be required to provide proof of residency or pay rent to the estate.
If the testament states that the estate is to be sold, if the administrator decides to sell the inheritance in order to pay off outstanding financial obligations, or if there is no testament and state law requires that the estate be sold in order to meet financial obligations, then the court may decide that the family member cannot continue to live in the house during probate.
Can a House Be Emptied Before Probate in TX?
Probate prevents fraud and misallocation of the inheritance. To ensure that all assets are distributed in accordance with the law, the probate process is designed to prevent anyone from removing the decedent’s personal property from the estate. The court must grant probate and appoint an executor before anyone can take valuables, money, and family heirlooms out of the home. Once the probate court settles the estate, the seller can empty the house and sell or donate any unwanted personal possessions.
How Long Does It Take To Sell A House In Probate?
Probate sales can take a long time to close. If a testament is verified by a probate judge, the entire probate process can last for just six months; otherwise, probate can take up to two years. If several inheritors are named, financial obligations are unmet, the title is contested, or other complications are in play, the sale of the estate will be delayed.
Do All Heirs Need to Agree to Sell an Inheritance?
Heirs who do not want to pay the mortgage or live in an inherited home after its owner has passed on might agree to sell it. The situation can become complicated if one inheritor wants to keep the home while the others want to sell, or if several inheritors want to keep the home while a single inheritor wants to move forward. An administrator who speaks with a real estate agent about listing the family home may find that all inheritors must sign the seller’s contract to validate the agreement. A real estate attorney can provide advice and help the steward find a solution that is amenable to all parties.
“I sold my mom’s home to Southern Hills Property Group. It was a tough time and I didn’t have the patience to list her home with an agent plus the work of repairs needed to sell it to the public. It was easy and all went smoothly. They bought the house without any repairs and closed in 3 weeks. Very happy with them”
A Cash Sale Is the Easiest Way To Sell a House In Probate
A cash sale is the fastest and easiest way to sell a house in probate. Selling a house as-is to a cash buyer takes the costs and responsibilities of maintenance and repairs off your plate. Listing the house and paying fees to realtors won’t be necessary, and the sale is sure to be closed, so you won’t have to worry about a contract falling through. A cash sale service like Southern Hills Home Buyers in [market state] can simplify the probate selling process. Our team buys houses and mobile homes as-is, in any condition. We can even recommend a lender or help you avoid foreclosure. If you’re in charge of selling a house that has been passed down and willed to you, we can help speed up the process.
Probate can be a costly and time-consuming process. Selling an inherited home during probate can be a complicated endeavor that requires careful consideration. Simplifying the selling process can make a huge difference in the amount of time it takes to settle the estate after a loved one has died. Our qualification process is straightforward, and our professional probate specialists serve all cities in TX, including Dallas, Houston, Austin, San Antonio, Fort Worth, and El Paso. When you work with Southern Hills Home Buyers, you’ll be able to lighten your load and look forward to better days ahead during probate.