After the death of a loved one in Tennessee, the heirs of the deceased individual must settle the estate through probate before they can collect their personal inheritance. Even property that is willed to heirs through a signed document may need to go through the Tennessee probate journey. In many cases, the home of the deceased is one of the assets that may need to go through probate. However, selling the property is often necessary before the estate can be settled and proceeds can be disbursed to the heirs. With this in mind, you need to know more about selling a house in probate in Tennessee.
- The probate process requires documentation including a will (If there is one) to be filed with the county or circuit court.
- Expect settlement costs including court fees, filing fees, and any probate attorney fees.
- Selling with an agent will require preparing the inherited property whereas selling with an investor or cash buyer can be done as-is.
- If you choose not to sell the inherited property to save on capital gains taxes, you can move into the home for at least 2 years.
Table Of Contents
- Probate Sales Process For Selling Real Estate In Tennessee
- When Can The Executor Sell The Probate Property In Tennessee?
- Can You Sell A House Before Probate Is Complete In Tennessee?
- Do You Need To Go Through Probate To Sell An Inherited House In Tennessee?
- Probate House Sale Issues In TN
- Options To Consider When Selling A Probate Property In TN
- Selling Probate Property With A Tennessee Real Estate Agent
- Selling Probate Property To A Cash Buyer AS-IS
- Frequently Asked Questions: Tennessee Probate House Sale
Probate Sales Definition In Tennessee
In some instances, a Tennessee home is willed to a specific heir, and that property must be conveyed through the settlement of the estate. However, in many instances, the court will require the probate sale of this valuable asset. By selling the property, the mortgage debts, creditors, and TN property taxes can be paid off with the proceeds. In addition, the cash proceeds from the sale of the property can then be disbursed appropriately to the beneficiaries. When someone talks about a probate sale, they are describing the sale of a property through the estate. Administering the sale is done by estate executors or by personal administrators who are granted the right to sell on behalf of the sellers.
Probate Sales Process for Selling Real Estate In Tennessee
There are specific Tennessee estate laws that must be followed by the sellers, and there are also steps that the appointed representatives or others who are granted authority must follow in order to sell real estate that’s in probate in Tennessee. The personal representative or appointed agent for the estate must first file a petition for probate with the local court. Probate isn’t a fast experience, so the appointed documentation should be filed as soon as possible. Once the rightful, related documentation has been filed with the court, an executor or administrator will be appointed to act on behalf of the sellers. Generally, the deceased person will assign a person to represent the estate in his or her will. However, in the event that there’s not a recognized will, potential administrators must petition the court for the authority to handle the assets and debts.
Once all petitions have been presented and reviewed and any objection petitions have been reviewed, the TN judge will issue a response. He or she will assign a specific individual to be the estate’s appointed representative. The person selected by the judge will then be responsible for selling the probate real estate. Before the sales proceeds can be divvied out to the beneficiaries, the taxes and related debts must be paid.
When Can the Executor Sell the Probate Property In Tennessee?
Properties can be marketed to sell by the executor as soon as the judge grants approval through the Tennessee probate proceedings. The executor can work with real estate agents who are licensed to work in Tennessee or market the property themselves. Generally, an offer must be at or above the fair market price for the property as determined by an appraisal. If there are significant debts tied to the property, the court must review offers and gives final approval for the offer that the executor wants to accept. In most cases, the traditional sales experience is not as fast as sellers would like it to be. With this in mind, accepting a cash offer on the property could speed up the timing and help the executor to settle the estate in TN faster.
Can You Sell a House Before Probate Is Complete In Tennessee?
Generally, a house in probate in Tenness will be listed on the market to sell. In fact, a house may need to be sold before final probate approval can be granted. This is because the court-appointed agent is responsible for paying all creditors, debts, and taxes for the estate first, and the final disbursement of the remaining funds must be given approval by the court. The proceeds from the sale of the property will be placed in an escrow account so that all outstanding debts can be paid accordingly.
Do You Need to Go Through Probate to Sell an Inherited House in Tennessee?
For a home that is granted as a direct inheritance to a specific beneficiary, the property will be conveyed after the estate has been finalized. In many cases, however, homes must go through probate in this state before they can be listed to sell. For a home that is not bequeathed to a specific person, the proceeds from its sale may need to be applied to debts as a first step in the probate journey. In both instances, a house must pass through probate. However, if a house is owned jointly or is covered by a living trust, the house does not need to go through probate.
Probate House Sale Issues In TN
Selling a house in probate can take a considerable amount of time. Depending on market conditions when listing a house to sell, it could take months for reasonable offers to be received and for the judge to grant approval on a specific offer. The terms of an acceptable offer must be sufficient to pay off outstanding mortgage debt, insurance, and taxes. Buyers often need to go through their own mortgage application steps, and this can delay the probate timeline. With this in mind, accepting a cash offer from a motivated buyer or Tennessee investors may be a smart option for executors to consider.
In many instances, a probate house is not ready to sell immediately. It may have outstanding maintenance and repair issues, outdated design elements, and more. Working on a house comes with the need to pay costly contractors’ service fees. You may also need to address other issues that could require court permission to proceed and bog down the probate timeline further. Selling the home as-is for cash could prevent the need to make repairs and updates before the house is offered to sell on the market by the sellers.
Options You Can Consider When You Sell a Probate House In TN
A few options are available when you sell a house in probate in Tennessee. With a closer look at what these possibilities are, you can intelligently decide which is a suitable option for your situation.
Listing the Probate Property with a Tennessee Real Estate Agent
One option available is to work with real estate agents to sell the property on the open market. By doing so, you may take advantage of a competitive marketplace and receive a fair offer based on the appraisal value. However, the house will be competing directly with other listings. This means that you may not receive a reasonable offer for weeks or even months, depending on marketing conditions. Because many buyers need to set up a mortgage, a month or longer may need to be added to the total timeline. In addition, because the home will compete against others, it often must be in great condition. This means that the sellers may need to fix up the property before it can be offered to sell.
Selling the Property to a Family Member
Another idea is to sell the property to a family member through an informal sale. The property in the estate will not need to go through a make-ready project, and it will not need to formally be listed to sell. However, a family member may still need to apply for his or her new mortgage, and this could delay the probate timeline. Generally, a family member will make an offer based on the appraisal value, but there may be instances when the family member wants to buy the house for an amount equivalent to the existing mortgage debt. Remember that the court must review and approve the amount that’s offered by the family member.
Selling the Probate House As-Is to a Cash Home Buyer
A third option is to sell the house as-is to a cash buyer. A cash buyer may purchase the home in its current condition. If this is the case, it is not needed to cover fees to fix up the house before the sale is completed. In fact, you may not even need to clean the home and get rid of the home’s furnishings when you sell to an all-cash buyer. Plus, the buyer will not need to proceed with the mortgage application steps, so he or she may be able to close in a week or less in some cases. This can dramatically speed up the probate timeline.
Tennessee Probate House Sale Frequently Asked Questions
Can an executor purchase the house himself?
When an executor sells estate assets to himself, this is known as self-dealing. This is illegal in the state of Tennessee. However, there may be some instances when the purchase could be viewed as an arms’ length transaction. Because this is a complicated area of the law with significant ramifications, it is important to consult with a real estate attorney in Tennessee before taking any action.
Can you live in a house during probate?
There are two primary instances when an individual can live in a house in probate. For example, the sellers can lease a house to a tenant, and the sellers can act as the landlord in the transaction. Another instance is if the individual was living in the house prior to the property owner’s death. However, because a probate property may need to be sold as soon as possible during the process, it makes sense in many cases to keep the property vacant until the sale.
Can you sell the house before probate?
The title of a house can be conveyed to a decedent without going through probate if the title was held jointly with a spouse or another family member. However, if the house has not been specifically bequeathed in this way, it must go through probate. The house may be listed to sell as soon as an executor or estate representative has been named by the judge to represent the estate.
How long does it take to sell my probate house?
Because probate cannot be completed in many cases until a house is sold, it makes sense to start searching for interested buyers as soon as possible. Informally, it could take anywhere from a few days to months to receive a qualified bid on a listing. Selling a home with the service of a real estate agent is the traditional response, but this timeline may be delayed by a buyer’s mortgage issues, make-ready projects, and more. For these reasons, working with a cash buyer for the sale could save a tremendous amount of time. Because this type of buyer may buy the property as-is, you may save additional time and money by avoiding make-ready repairs and updates.
Can you empty a house before probate?
All of a deceased individual’s accounted assets are held until after probate approval. This means that even a partial clearing of the house could open you up to legal issues. After probate approval, the executor may give notice to beneficiaries so that they can express interest in a specific article of value. However, if the deceased has high debts, some of the contents in a home may need to be sold to cover the associated debt. In many cases, however, a home is filled with many low-value items or even outright junk that the family is not interested in. During a traditional sale using a real estate agent, the property may need to be emptied of its contents before the sale can be completed. However, if you sell to a cash buyer, you may be able to sell the property and its contents to the buyer.
Do all heirs have to agree to sell the property?
All heirs to an inheritance property must agree to sign the sales contract. In some instances, there is a dispute regarding whether to sell or keep a property. When proper guidance and agreement cannot be arranged within the group of heirs, it may be necessary to file a partition lawsuit. This may force all parties to sell the property. A lawsuit, however, can drag out the probate experience. Because of this, it may be in the best interest of all sellers if the matter is decided outside of the courtroom, such as through cash sale probate.
The Easiest Way to Sell My House in Probate
At Dignity Properties, we’re probate house buyers in Tennessee who are ready to buy homes today. We want to make it as simple as possible for you and other heirs to profit when you sell your inheritance. Rather than try to locate interested buyers or investors for your house, you can conveniently sell your inheritance to us. For sellers who want to learn more about a fast sale for probate properties and get a cash offer, contact Dignity Properties today.
This probate sale guide applies to all cities in Tennessee including, Chattanooga, Knoxville, Nashville, Memphis, Pigeon Forge, Murfreesboro, and more!