When a person dies, they often times leave real property to their beneficiaries. So long as there are sufficient assets to pay off any creditors, the beneficiaries can choose whether to keep the property or sell it.
If the beneficiaries choose to sell the property and the property has to go through the probate process, there are three ways to deal with selling the property:
1. The beneficiaries can wait until the probate process is complete and the title has transferred into the beneficiaries’ name. At that point, because the title is held by the beneficiaries, they can sell the property and sign all of the closing documents individually. The only downside to this option is that the beneficiaries have to wait for the probate to be completed which can often take 6 months or more.
2. The property can be sold during the probate process through a court’s confirmation of sale. In this process, the executor or administrator of the estate signs the documents to sell the property. Once a buyer is found, there is a court hearing to confirm the sale. At the court hearing, the property is placed up for auction by the court and any member of the public may overbid the buyer and purchase the property. This helps to make sure that the estate gets the highest price possible for the property.
3. In some cases, the property may be sold during the probate process without a court confirmation hearing through the Independent Administration of Estate Act. This act, passed in 2011, allows property to be sold where all of the beneficiaries of the estate receive notice of the sale and the price received is not less than 90% of the appraisal price.
In most cases, any of the three methods described above can be used to sell real property. Methods two and three allow for a much quicker sale as they are done before the probate concludes. Should you have any questions regarding the sale of real property in probate, please contact our office.