Selling a home can be a complex and stressful process. If the property also happens to be a deceased person’s house, it can be even more difficult.
In this post, I’ll guide you through the most common questions about how to sell a deceased person’s home.
What are the steps to selling a home in probate?
- How long do you have to sell a house after someone dies? Is it the right time to sell the deceased person’s home?
- When can you sell a house after someone dies? Find out are you even allowed to sell.
- Check the deed to determine who can sell a house after someone dies?
- Who should you hire first: attorney or realtor to sell house in probate?
- Start the probate process: how to get a court-appointed executor of the estate
- Secure the property, after you determine who can enter the deceased person’s home?
- How to clean out an estate house
- Should you renovate a probate property?
- When someone dies how do you pay their bills? Who needs to be notified?
- How is inherited property taxed when sold?
- Wrap-up the rest of probate: how long does it take to get inheritance after the house has been sold?
- Ready to get started? How to start probate to sell a deceased person’s house
These explanations and examples will help you understand your road ahead.
How long do you have to sell a house after someone dies?
There‘s no deadline by which you must sell a house after someone dies. However, the sooner the better, because as more time passes, more problems come up with the property, the family, the long probate process, or all of the above.
How long can a house stay in a deceased person’s name?
You may be surprised to learn a house can stay in a deceased person’s name for a very long time. We’ve handled estates where decades had passed since the original owner died, and the house stayed in the deceased person’s name all those years.
This can lead to many problems during the eventual delayed probate, and increase the legal fees and expenses. But a long delay usually doesn’t affect who inherits.
How long after a death can you sell a house?
You can sell a house years, even decades, after the owner dies. However, a long delay may trigger capital gains tax the heirs would have otherwise not had to pay. Read more about this at later when I answer “How is inherited property taxed when sold?“
When can you sell a house after someone dies?
You can theoretically sell a house immediately after someone dies. In reality, the soonest you can sell will be at least several weeks or months after someone dies. Because of how long it takes to get a court-appointed executor to have the legal authority to sell.
Do all heirs have to agree to sell property?
No, all heirs don’t necessarily have to agree to sell a property after someone dies. If the will directs the executor to sell the property, if the estate needs funds to pay its bills, or if an heir is living on the property and won’t leave, then it’s not required for all heirs to agree.
Can the executor sell property without all beneficiaries approving?
Yes, the executor can sell property even without all beneficiaries approving if the will directs him to sell, or if the estate doesn’t have enough other liquid assets to pay the estate debts, expenses, or taxes.
Who can sell a house after someone dies?
The person who can sell a house after someone dies depends on whose name is on the deed (or share certificate, for cooperative apartments). If the deed names:
- Joint owners with rights of survivorship, then the surviving joint owner can sell the house
- A husband and wife or tenants by the entirety, then the surviving spouse can sell the house
- Tenants in common, then all tenants, including the heirs or executor for the person who died, can agree to sell the house
- A trust, then the trustee can sell the house
- The owner’s individual name only, and he died with a will, then the court-appointed executor can sell the house
Can an administrator of an estate sell property?
Yes, the court-appointed administrator of an estate can sell the property if:
- The deed is in the owner’s individual name,
- He died without a will, and
- Either the estate needs liquid funds to pay estate debts, expenses, or taxes or the heirs agree.
Who to hire first: attorney or realtor to sell house in probate
Hire your attorney first to sell a house in probate. Why?
- Your lawyer can help you get and read the deed and will to determine who has the right to sell the property
- He may also help decide who should be the executor or administrator
- To start the probate process as soon as possible, since it may take a long time.
The executor cannot sign a legally binding listing agreement with a broker until he’s received his court-appointment, anyway.
How to get a court-appointed executor of the estate
Getting letters testamentary, the court certificates for the executor of your estate, is the first step of the probate process.
You may find it helpful to pause here and learn more about the probate process, in general:
- How long does probate take in New York?
- How much does New York probate cost?
- How much are New York probate lawyer fees?
- And 3 ways to start probate without paying upfront fees.
Who can enter a deceased person’s home?
Only a court-appointed executor can legally enter a deceased person’s home. The executor must show his court-certified letters testamentary to the doorman, condo or co-op management, or even the police as proof of authority and right to enter.
How to clean out an estate house?
First, the executor must secure the property against theft, damage, etc. Then, to clean out an estate house, you must:
- Determine who will clean it out,
- Sell the house contents that have value, and
- Completely empty the estate house for sale.
Who cleans a house after a death?
The executor is in charge of cleaning a house after death, but he doesn’t necessarily have to do everything himself.
The heirs can help identify family heirlooms that have sentimental but not monetary value. The probate lawyer or a professional executor can identify and collect the important legal, financial, and tax records. And the executor may hire a professional estate cleaning service, if needed, to make the property presentable to list and sell.
How to sell house contents after a death
The executor will sell any items of high value (such as collectibles, jewelry, and possibly furniture or high-end electronics) that are not listed in will. He may hire an estate sale appraiser to help with this.
For the remaining house contents that have no sentimental or low monetary value (such as clothes, low end furniture or electronics), it’s usually more cost-effective to throw these away without an estate sale. Why? Because the estate monthly house bills (such mortgage, taxes, water) usually cost more than any cash from an estate sale. So it’s most cost-efficient to empty the house and list it for sale as soon as possible.
How to empty an estate house
Your executor will hire a professional cleanout service to empty the estate house. Heirs sometimes want to do this themselves. But an experienced professional executor knows that it’s more efficient to hire a professional crew to bring trucks, dumpsters, and a whole team to empty the house as soon as possible.
Should you renovate a probate property?
In most estates, it’s not worth it to completely renovate a probate property, because the estate owes mortgage, maintenance, tax, and other payments every month that passes without selling the property. Each month of delay can cost the heirs thousands of dollars, so time is of the essence.
Also, many estates are cash poor, and don’t have enough liquid assets to pay for extensive renovations anyway.
Often bare basic steps such as emptying the contents, a thorough cleaning, and fresh paint are usually more than enough to attract good enough offers and get the house sold.
When someone dies how do you pay their bills?
When someone dies, you must decide who will pay the house bills (such as the mortgage, maintenance, taxes, and water) during probate, and how.
Who pays the house bills during probate?
The executor will pay the house bills during probate from the estate accounts, not his personal funds. If the estate doesn’t have any cash or liquid accounts, then the executor may ask the heirs if they can pay the house bill during probate and get reimbursed at the end.
How to pay the house bills during probate
If the estate has liquid funds, then the executor will pay the house bills from an estate account.
If there are no funds to pay the house bills, then a savvy professional executor contact the lender, management company, etc. to assure them the estate plans to sell the property and will pay all arrears at closing. If the executor does this well, it will save the estate on unnecessary late fees and legal and foreclosure bills. However, if there’s an urgent bill (such as keeping the electricity on, maintaining heating to prevent pipes from bursting, or an emergency plumbing or extermination situation), the executor can arrange a short-term estate loan.
How is inherited property taxed when sold?
When inherited property is sold in probate, there may be taxes due for transfer, estate and inheritance, or capital gains tax.
Transfer taxes depend on the state, city, and locality where the property is located and will be the same as when selling a non-probate property.
Federal estate tax only applies if the estate is worth several millions of dollars (check IRS website for the exact amount). Some states may have their own estate or inheritance tax, as well.
How much is capital gains tax on inherited property? 4mm
Usually there is no ($0) capital gains tax on inherited property because of stepped-up basis. Stepped-up basis is a where the IRS treats the date of the death value of the property as it’s purchase price, or basis. So if the executor sells the inherited property shortly after the date of death, there is no capital gains.
An exception is if the inherited property isn’t sold until much after the date of death.
What is the purpose of a date of death appraisal?
A date of death appraisal is used for capital gains tax, estate tax, and to buy out heirs.
If the executor or heirs do not sell probate property, then the heir will use a date of death appraised value as their inherited basis.
A date of death appraised value is also used to calculated if estate or inheritance tax is due.
Lastly, if an heir wishes to buy the property the other heirs, they may use a date of death appraised value to negotiate the purchase price.
How long does it take to get inheritance after the house has been sold?
It usually takes at least a few months (sometimes longer) to get inheritance after the house has been sold. Why? Because the executor must collect all other estate assets and ensure that all estate debts, expenses, and taxes have been paid. Then the executor may also need to formally close the estate with an estate accounting, before releasing funds to the heirs.
Who gets the money from a probate sale?
The executor receives the money from a probate sale and deposits it into the estate account.
How to start probate to sell a deceased person’s house
To get started, simply contact our office with the following information:
- Is there a Will?
- Who are the heirs or closest surviving family?
- Property address
- Estimated value of the property and other estate assets
Or free copy of probate book to learn more
Keep in mind that all of these estimates are based on clients guided by good probate attorneys or professional executors. Our clients rely on our team because of our years of experience and knowledge about the entire probate process.
Going through the probate process on your own usually requires even more time, and leads to frustrating complications. Contact us today for a no-cost consultation about getting started with your probate case.
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