Selling Real Property in Probate: What You Need to Know
Selling real property in probate can be complex and time-consuming. Learn what you need to know about the probate process.
What Is Probate?
Probate is the court-supervised process of administering a deceased person’s estate assets. The process involves:
- Validating a will (if one exists)
- Organizing assets and liabilities
- Transferring property to beneficiaries
- Settling the deceased’s estate
People who pass away without a valid will are considered to have died intestate. Intestate estates still need to be probated. Without any documentation to direct the judge, state law will determine how all assets will be divided.
Probate deals with two kinds of properties – personal and real. Personal property is movable, whereas real property is fixed to land, such as a house. When a person dies, their assets are placed in probate depending on the value of the assets. Afterward, the probate court administers the property.
During the administration of an intestate estate, the assets are transferred to the decedent’s closest relative per the state’s intestate succession laws.
Probate in Nevada and the sale of properties associated with it is more complicated than selling real estate property ordinarily. Not only is the contract carefully scrutinized by the court in these cases, but additional procedures have to be followed before the property can be sold.
Our firm is committed to simplifying the probate process and helping clients understand their rights and responsibilities during this time. Our experienced attorneys can help you navigate probate’s complexities and ensure the process is done correctly.
We can help you with the following:
- Understand the probate process in Nevada
- Determine if the deceased left a valid will
- Identify and locate the deceased’s assets
- Locate and inform heirs of their inheritance
- File an inventory with the court
- Secure the property
- Handle creditor claims against the estate
- Deal with the sale of a decedent’s real property
- Distribute the assets to the heirs
If you are selling real property in probate, contact Wood Law Group. Our experienced lawyers can help ensure the bidding process goes as smoothly and quickly as possible. Contact us today to book a consultation.
Is Probate Required to Sell Property?
Yes. The probate process aims to eradicate the possibility of fraud related to a property sale and has to comply with several procedures required by probate laws. The probate court oversees the process, which contains specific rules on paperwork, timelines, and deadlines. In addition, a particular chronological order should be followed during the sale process.
The probate court needs to approve the sale of real property. The court will also oversee the bidding and overbidding process to ensure that potential buyers know the process and that the winning bidder is fairly chosen. A judge may also opt for other proceedings if any issues arise during the bidding process or a dispute arises.
Selling a House in Probate
A house is often the highest-valued asset in a probate estate. Whether a will deals with a house or not, it is an asset in the estate and forms a part of the probate property. This property is considered and administered to settle all taxes, court costs, and debt obligations of the estate before the balance can be distributed to the heirs.
The house may be required to be sold by the executor or administrator during probate proceedings. As a result, the property will probably have ongoing expenses, such as mortgage payments, homeowners insurance, property taxes, and probate fees.
If the estate does not have sufficient income to settle these expenses, the value of the estate will diminish by the total amount of these accumulating expenses. A reverse mortgage can also reduce the value of the home.
As the estate’s value decreases, it becomes essential to try selling the property as soon as possible. The proceeds from the property sale are used to settle debts and taxes, if any, and the balance sum is then distributed to the beneficiaries.
Suppose you are faced with questions about selling real estate in probate. In that case, it is an excellent idea to appoint experienced Las Vegas probate lawyers to assist you in facilitating the complex process of succession and estate planning.
Any delays in the process caused by a lack of compliance with probate laws can diminish the value of the estate’s assets and should, if possible, be avoided.
Sale Procedure of Probate Real Estate in Nevada
There are a few steps involved in selling a probate property.
Appointment of an Executor or Administrator
The probate court appoints an estate executor or administrator to sell the real property. The court will likely confirm the appointment when appointing an executor, provided the appointee is prepared to act.
In the absence of a will or when no executor has been named, the court usually appoints the closest relative as administrator or personal representative.
Appraisal of the Property
The next step is to have the value of the property appraised. Typically, the executor or personal representative hires a real estate agent to conduct a market appraisal and assist with the sale before listing the property on the market. The court oversees the probate sale process and ensures that the property is not sold below 90% of the appraised market value.
Sale of the Property
The potential buyer makes a written offer and pays a ten percent deposit. Although the executor or administrator can accept or reject the bid, the agreement is only concluded once the court confirms the sale.
Confirmation of Sale by Court Hearing
A buyer’s offer is then submitted to the court for confirmation by the estate representative through their probate attorney.
The probate court requires the new buyer and any interested parties to attend the sale confirmation hearing. During the court hearing, the court holds a type of auction. An opening price for a property is the accepted offer price plus a prescribed increase determined by the court.
During the hearing, the property is sold to the highest bidder as in a regular auction. Deposits must then be paid. An original buyer who is outbid will have their deposit reimbursed; the new buyer can inspect the home.
Formal vs. Informal Probate Process
At the outset, the probate court determines whether the probate administration process is formal or informal.
Formal Probate Process
Formal probate is more complex and involves the continued involvement of the court. For example, if the decedent left a will, but the original will cannot be located, or if there is a dispute over the validity of the will or in a case where there are competing wills, formal probate will allow the court to keep a very close eye on the proceedings.
If there is a probate real estate sale under formal probate, the court will play a more significant role in the sale, which can lead to additional time and complexities.
Informal Probate Process
Informal probate is adopted when there is an original will and no contest regarding its validity. Informal probate can be declared even without any will, provided there is no dispute about who the heirs may be. Informal probate is cheaper and easier than formal probate, does not require court approval, and does away with the need for court hearings.
In the formal probate process for a real estate sale, the court approves every step of the real estate transaction. This adds time to the procedure and can take over six months.
Can You Sell a House Without Going Through Probate?
Yes. By placing the house in a living trust, a person alleviates the need to sell the house through probate. Another instance where a sale through probate can be avoided is if you have a joint tenancy with rights of survivorship.
In this case, the house will automatically get transferred to the surviving owner. It is advisable to contact a planning attorney in Las Vegas with experience in probate sales to understand estate planning options that circumvent the requirement of probate.
Can the Executor Sell a House That Is in Probate?
The executor is empowered to sell a house during probate if there are insufficient assets to settle all the decedent’s debts, taxes, and probate-related legal fees. Indeed, the court can require the executor to sell the property. Once the house is sold and the debts settled, the leftover money can be distributed to the estate’s heirs. This is known as the residual value.
The sale of real property under probate can be immensely complicated. It is often a good idea to appoint an experienced probate attorney to improve your chances of a speedier resolution.
The probate attorney should know court procedures and the relevant statutory provisions. They will also help you understand the process and paperwork required to close the sale and distribute assets to heirs successfully.
The attorney can also help with any negotiations or disputes during the probate process, including obtaining a court order for a proposed property sale. Additionally, they can work with the estate’s beneficiaries so all sides have a transparent and unified understanding of what is happening.
Contact an Experienced Probate Attorney for a Probate Sale
At Wood Law Group, we are experienced in handling probate real estate sales. Our attorneys will work with you to identify the best possible action. We understand the legal complexities involved in real estate transactions under probate and will help you to manage a smooth sale process.
Contact us for a free consultation, and let us help you to navigate the probate estate sale process. We are here to help you through a difficult time with the least stress possible. Call us today!