In this article, we break down specific scenarios where selling your parents’ estate without undergoing probate is possible.
We explain each case which you can use to your advantage as the executor of the will or administrator of the estate, and offer insights on the easiest way to sell your deceased parents’ house if you choose that route.
Read all about it below.
Do You Need a Probate to Sell a House?
Generally, probate is necessary to sell an inherited property, as it is the legal process that authorizes the administrator of the estate or the executor to sell a house and distribute other assets.
However, there are six exceptions where probate may not be required. Let’s discuss them one by one.
#1 Small Estate Affidavit
A small estate affidavit is a legal document that simplifies transferring a decedent’s assets when the estate’s total value falls below a certain amount.
That maximum value and the specific legal requirements and procedures differ in each state where this affidavit is permitted. However, its purpose and core function are the same.
You can use a sworn written declaration—an affidavit—to claim the deceased person’s house without undergoing formal probate proceedings.
In the statement, you affirm that the estate qualifies as “small”, that all debts and claims have been settled, and that you have the legal right to receive the property.
Depending on the state, you may file the affidavit with the court, the county clerk’s office, or the institution holding the asset.
#2 Community Property
In community property ownership, spouses generally own 50 percent of the real estate they acquired during marriage.
With survivorship rights, the surviving spouse immediately becomes the property’s sole owner when the other dies. In this case, for example, a wife can sell her deceased husband’s property without probate.
Additionally, the property is usually not included in the deceased spouse’s estate.
Therefore, a legal proceeding is not needed to determine ownership, making community property with survivorship an effective probate avoidance strategy.
Moreover, because it’s easier to establish a clear title, selling the house after one co-owner’s death is substantially simplified.
However, there are several important things to note about this ownership structure:
- It only applies in community property states.
- The right of ownership varies across states.
- The property must be classified as community property.
#3 Joint Ownership
Joint ownership is a property arrangement where two or more people hold the property title together. The specifics of that ownership determine whether probate is required.
It generally is not when there is joint tenancy and right of survivorship.
In this arrangement, each owner holds an equal share of the house. Additionally, when one owner dies, their share directly and automatically passes to the surviving joint tenants.
This transfer can happen outside of probate, as the remaining owners already have legal title.
So, if you inherited your parents’ house as a joint owner with survivorship, you can sell the house when one owner is deceased without involving the probate court.
If there are other surviving joint tenants, you will need their consent to sell, although probate remains unnecessary.
#4 Living Trust
A living trust refers to a legal arrangement that allows an individual to transfer ownership of assets into that trust while they are alive.
If your parents have one, they can transfer the title of their house to the trust by using a new deed.
They are allowed to maintain control over the property during their lifetime. However, the house will not be considered part of their estate when they are deceased.
Instead, the property is owned by the trust, and the individual who is the successor trustee manages it without probate court involvement.
You can serve a dual role as the estate executor and also the successor trustee if there is a living trust.
In the trustee role, you can sell your parents’ house after their death without going through probate as long as you adhere to the terms of the trust.
#5 Beneficiary of Transfer-on-Death Deed
The primary purpose of a Transfer-on-Death (TOD) deed is to allow property owners to choose who will automatically inherit their real estate when they die, thus bypassing court proceedings.
Suppose, for instance, your father has a TOD deed for his home, and you are the beneficiary. Generally speaking, that allows you to sell your dad’s house without probate.
How so? Probate typically determines legal ownership of assets after death. But a TOD deed immediately transfers title to the beneficiary without it.
The beneficiary also has the immediate ability to claim the property. That eliminates the need for court procedures to distribute the assets.
In most cases, you can make your claim with a certified copy of the death certificate and the recorded deed. After that, selling is straightforward.
#6 Power of Attorney
When someone (the principal) has a power of attorney (POA), they have authorized another person (the agent) to act on their behalf. That can include financial and legal affairs.
That authority is valid while the principal is still alive. It ends with their death.
So, for example, as an agent with applicable authority, you can sell property on your mother’s behalf during her lifetime.
Your power terminates at her demise. So, your deceased mother’s house would typically need to go through probate regardless of your prior POA.
While being an agent doesn’t directly allow you to sell the house before probate, you could use your authority before her death to put a probate-avoidance plan in place.
It might include estate planning tools previously mentioned, such as a living trust, transfer-on-death deed, or joint ownership.
If none of the six cases apply to you, you don’t have a shortcut. It helps to know how long after probate is granted you can sell the house.
The Easiest Way to Sell an Inherited House
If you’ve inherited a house that needs work or has other problems attached to it, selling it traditionally, via a real estate agent, can be challenging.
Fortunately, there are specialized companies that purchase homes in their current condition as investment properties. Even if a property is in probate, it can be sold to these professionals.
Selling to an investor can be the easiest way to liquidate inherited property for reasons such as those listed below.
1. No Need for Updates or Fixes
Inherited property can be sold just as it is. Whether you inherited a hoarder’s house with significant neglect or a home needing only minor repairs, no work is required on your part.
2. Fast, Hassle-Free Sale
These companies typically handle most of the paperwork, simplifying the transaction. They also finalize deals quickly, often closing in a matter of days.
3. Immediate Cash Deal
With a cash purchase, you skip waiting through mortgage approval, which speeds up the process and reduces the risk that the deal may unravel due to a financial contingency.
4. No Closing Costs
In a conventional real estate sale, it’s typical for the buyer and seller to divide closing costs. Cash buyers often cover closing costs entirely.
5. Avoid Agent Commission
If you’re selling a house in probate, you’ll usually need to use and pay a real estate agent.
However, selling without probate or afterwards to a “we buy houses” company eliminates hiring an agent and paying them a commission.
But there is a downside. Although home buying companies can make the sale quick and easy, their business model requires them to offer less than the home’s market value.
The offer may be notably lower when you are selling an inherited house as is, as it reflects the cost of repairs and improvements plus the investor’s margin for selling the home at a profit.
If, despite these risks, you find the benefits appealing, get a few cash offers at a time from different companies that buy inherited homes and compare them.
To further explore other ways to sell your inherited house, read up on selling deceased estate property.
