Selling a House in Probate Nebraska

This article is an informative resource for anyone dealing with the probate process. It will explain what is probate and how you can navigate the often tricky process to sell a property in probate while still making a profit.

What is a Probate?

When someone dies, the things they owned—like a house, car, or money—need to be given to the right people. If they had a will, it says who should get what. A person called an executor helps make sure everything is done the right way. If there’s no will, or if people disagree about it, the court gets involved. This process is called probate.

There are two types of probate: informal and formal. Informal probate is simpler and quicker, especially if there’s a will and no one is fighting over anything. Formal probate takes longer and happens when there’s a lot of debt, the will is missing, or people argue over who gets what. In those cases, the court helps decide.This article addresses the trickier process of the formal probate process, which can occur when the estate owes a large amount of debt, the will is contested, or the deceased left a will but the original will cannot be located. In these cases, the Court must become involved.

Can a House Be Sold While in Probate?

Yes, you can! When someone dies, their house and other belongings are part of their estate. If the house is in probate, it means the court is helping figure out who should get it. The house can be sold, but it depends on who’s in charge.

A house in probate can be sold by:

• The executor (the person named in the will to handle everything),
• An administrator (chosen by the court if there’s no will), or
• The court itself (if no one else is around to manage the estate).

Once it’s decided who the house goes to, that person (or people) can ask the court for permission to sell it.

What Does it Take to Sell a House in Nebraska While in Probate?

The job of an executor is to take care of the things a person leaves behind when they die, and make sure everything goes to the right people, called Heirs or beneficiaries, like the will says.

But sometimes, the person who passed away owed a lot of money, or the house needs repairs, or there are unpaid taxes. If that happens, the executor, administrator, or even the Court can sell the house to pay those debts, even if there are Heirs.

Here’s an example: An elderly woman dies and leaves a house worth $150,000, but she also has $90,000 in hospital and credit card debt. She has two Heirs, but no money in the bank. The executor may need to sell the house to pay the debt. Once the house is sold, the $90,000 goes to pay what she owed. The leftover $60,000 is then split between the two Heirs.

Sometimes, a house is sold in probate if there’s no will and no close family. In that case, the Court may sell the property and give the money to any relatives they can find.

Steps for Selling a House in Probate

If you own a property in Nebraska that is stuck in probate and you’re struggling to find a way to sell, there is hope! Depending on local and state laws, the process of selling a probate property can be completed in four steps. The first step is having an executor or administrator assigned, if there wasn’t one already assigned by the deceased.

If you are named as the executor, or you and the executor agree on what to do, you can choose to sell the house or keep it. For example, if the estate owes money or the house is far away and hard to take care of, selling it might be the best idea.

But before you sell it, you need to find out how much the house is worth. This is called an appraisal. After that, you’ll ask the court for permission to sell. Once the court says yes, you can sell the house yourself, use a real estate agent who knows about probate sales, or sell it straight to an investor.

Decide How to Sell the Property: 

Valuation or Appraisal 

First, you need to know how much the property is worth. Hire a trusted appraiser who understands probate rules. In many states, the court requires the home to sell for at least 90% of its value, so it’s important to get a fair and accurate appraisal.

In many states, the court says the property must be sold for at least 90% of its appraised value. That’s why it’s important to pick someone who won’t say it’s worth way more than it really is.

Listing the House 

After the appraisal, you and the executor (or lawyer) must ask the court for permission to sell the house. The form will show the home’s value and how you plan to sell it—like at an auction, through a realtor, or to an investor. Once the court says yes, you can put the house up for sale. Make sure someone with probate experience helps you through the process.

Offers

When offers start coming in, you’ll need to choose the best one for you. Think about your goals—do you need to sell fast to pay debts, or can you wait for a higher price? Does the house need a buyer who can fix it up? Knowing what you want will help you pick the right offer and move forward.

Knowing what goals you need to meet with the sale of the property will help you decide which offer to accept so that you can move on to the next step…

Notice of Proposed Action

When a buyer makes an offer, they need to know the sale must be approved by the court first. This can take extra time, and some buyers might not want to wait. That’s why probate homes can be passed over, even if the price is good. But if a buyer is okay with waiting, the court will review their offer and decide if the sale can go ahead.

Bidding

For auctions, a probate property can be listed as ready to sell even before the court approves the sale to attract more bidders. Usually, the court manages the bids and follows strict rules, so auctions are used only as a last option. After someone wins the bid, the executor asks the court to approve the sale. But if any Heirs disagree, the sale can be stopped, and the court will decide what to do next.

Finalization of Sale

Hopefully, selling the house, condo, rental, or land goes smoothly. Even if there were some problems, once the court accepts an offer, it’s time to finish the sale. The executor or lawyer will file a final report and ask the court to approve the final steps. When the court says yes, the paperwork is signed, and the sale is official.

Mistakes to Avoid When Selling a Probate Property 

Moving Too Quickly 

When a person passes away, their family may try to move as quickly as possible to sell the property so that they have time to grieve. Or, if there is debt that has interest that is compounding monthly, the executor or administrator will try to sell the house as quickly as possible by valuing it below market value to pay off the estate. Sometimes a too-fast sale can also happen when the house is in poor shape or needs major upgrades the beneficiaries do not want to pay for. They may undervalue the property so that they can sell it as-is.

Not Completing a Real Estate Disclosure 

Depending on what state you live in, Real Estate Disclosure laws can be almost as tricky as the probate process! These laws are a list of issues (such as lead paint or asbestos) that must be disclosed to the buyers about a home before closing on the property. 

Most states require sellers and their agents to disclose in writing “material defects” about the home. According to the National Association of Certified Home Inspectors, material defects are “…a specific issue with a system or component of a residential property that may have a significant, adverse impact on the value of the property, or that poses an unreasonable risk to people. The fact that a system or component is near, at or beyond the end of its normal useful life is not, in itself, a material defect.”

Experienced real estate agents are great at navigating these tricky waters, but what if you inherited a house that you never lived in? How would you know what to disclose? In some states, the executor, person selling the property, and/or real estate agent may be exempt from filling out local real estate disclosure forms due to the property being in probate. This is because that person does not and did not live in the property, so would have no way of knowing what to disclose.

If you are unsure of your state laws, someone who is experienced in probate real estate (whether it be a real estate agent or investor who has purchased probate properties in the past) will be able to help you navigate these legal waters. If looking into the latter option, be sure to sell your property directly to an experienced investor who doesn’t mind purchasing a property in probate and is willing to take the risk of purchasing a home from someone who is unable to give proper disclosure. You do have options!

Failing to Hire a Lawyer

We can not emphasize this enough – a knowledgeable real estate lawyer with experience in probate can help you navigate the process of probate much faster and easier than going at it alone! Not only will they know how to petition the Court so that you can finally put that property up for sale, but they’ll be able to guide you through the legal steps to sell that unwanted house or property with less hassle and tears. Even consulting will help ensure you aren’t missing the blind spots of the probate process.

Waiting Too Long to Start the Probate Process

When someone loses a loved one, grief may cause us to put everything on hold while we process the loss of the deceased in our life. But what happens to the probate property during that time? Property taxes continue to add up, utility bills continue to come in, and the bank will want its monthly mortgage payments until the property is settled. Waiting too long can cause the estate’s expenses to add up fast, eating into the estate’s assets and leaving you in a difficult situation.