Selling a House After the Death of a Loved One | UpHomes

Guide to Selling a House After Death of a Loved One

Selling a house after the death of a loved one can be an overwhelming process.
Not only do you have to deal with the emotional stress of losing someone you love, but you also have to take care of all the practical matters that come with selling a home. This can include dealing with paperwork, cleaning out the property, and preparing it for sale.
If these tasks seem overwhelming, that's understandable. We've put together this guide to help with the process.
And while nothing can completely take away the pain and grief, we hope that following these steps will help make property sales after death a little less daunting.

Establishing the Status of the Estate

Many individuals who lose a loved one may not know that selling an estate is not as simple as putting a For Sale sign in the yard. There are a few crucial steps that must be taken before you can officially sell the property. 

The first step is to determine the estate’s legal status. This means, figuring out how you can start inheriting the house, whether through the probate process, living trust, or transfer on death deed. 

Once you know how you inherit the property, then you can start to take the necessary steps to sell it. Below are the three most common ways to inherit an estate:  

Probate

According to the American Bar Association, the probate process is the legal distribution of a deceased person’s assets. This includes their property, money, and possessions. 

If the deceased had a will, then the executor of the estate (the person responsible for carrying out the decedent’s wishes) will file it with the court. The court will then review the will to make sure it is valid and that all debts and taxes are paid. 

However, if the deceased did not have a will, in which case they are“intestate,” then the court will appoint an administrator to handle the estate. The administrator will be responsible for distributing the assets according to state law. 

Once all debts, taxes, and expenses are paid, the remaining assets will be given to the decedent’s heirs. If there is no living heir, then the assets will go to the state.

Due to the complex nature of the probate process, the law can vary from state to state so be sure to check with an attorney in your area to see what the process entails. 

Living Trust 

The American Bar Association defines a living trust as an arrangement where a person (the grantor) transfers their assets to a trustee. The trustee then manages the assets for the benefit of the trust’s beneficiaries. 

One of the best benefits of having a living trust is that it doesn’t go through the probate process. This means that the distribution of assets can happen much quicker and without court supervision. 

Another advantage of a living trust is that it can help the grantor avoid estate taxes. To do this, the grantor must transfer all their assets to the trust before they pass away.

Most people create a living trust to avoid probate and to reduce estate taxes. If you are thinking of creating a living trust, it is important to speak with an attorney to make sure you are aware of all the benefits and drawbacks. 

Transfer on Death Deed 

A transfer on death deed (TOD deed) is a legal document that allows a person to transfer ownership of their property to another person after they die. The TOD deed must be recorded with the county recorder’s office for it to be valid. 

TOD does not go through probate, which means that the transfer of ownership can happen much quicker and without court supervision. 

Unlike the trust, TOD does not help you avoid or reduce estate taxes, but is still a good option if you want to avoid probate. 

Identifying Key Roles and Tasks

Assuming you have determined the legal status of the estate, the next step is to identify the key roles and tasks that need to be completed to sell the property. The following are some of the most common roles and tasks: 

• Heirs/inheritors: The heirs or inheritors are the people who will receive the property after the death of the owner. They can be determined by a will or by state law if there is no will. 

• Estate executor: The executor is the person appointed by the will to administer the estate. They are responsible for settling all debts and distributing the assets according to the will. If there is no will, then the court will appoint an administrator.  

• Real estate agent: A real estate agent will help you list and sell the property. They can also provide you with market data and advice on how to price the property. 

• Estate attorney: An estate attorney can help you with the legal aspects of selling the property, such as preparing and filing the will and handling probate. 

• Appraiser: An appraiser will help you determine the value of the property. 

• Home inspector: A home inspector will inspect the property to identify any potential problems that need to be addressed before listing the property for sale.

These are a few of the key roles and tasks involved in selling a house after the death of a loved one. Be sure to consult with an attorney in your area to get more specific advice on what needs to be done with your personal situation. 

Managing Finances Related to the Home 

Once the legal status of the estate has been determined and you can move forward with selling the property, the next step is to take care of any financial responsibilities related to the home. 

Below are some common financial tasks that will need to be handled: 

Paying the Mortgages and Utilities

When a homeowner dies, the mortgage and other debts do not go away. Therefore, responsibility for paying these debts falls on the estate. This means that the executor or inheritor will need to take steps to ensure that the mortgages and other bills are paid.

One option is to have the mortgage or utility company continue to bill the estate. Another option is to have the bills transferred to the name of a living heir. If there is no living heir, then the bills will need to be paid from the estate funds. 

Running a Title Search

A title search is a process where the title to a property is examined to make sure there are no outstanding liens or other issues that could prevent the sale of the property. 

The executor will need to hire a title company to conduct the search then prepare and file the necessary paperwork with the county recorder’s office.

Paying Taxes

The executor will also need to make sure that all property taxes are paid. This includes:

• Estate and inheritance taxes: Which are taxes on the value of the property that is being passed down to the heirs.

• Capital gains and income taxes: Which are taxes that are imposed on the profits made from the sale of the property.

These taxes can be quite costly and it is important to factor them into the selling price of the property.

The executor or heir will need to work with an accountant or tax professional to make sure that all taxes are paid correctly and on time.

Home Insurance

It is also important to make sure that the property is properly insured during the sale process. This will protect the property from any damage that may occur when it is vacant or being shown to potential buyers.

The executor or heir will need to contact the home insurance company to obtain a new policy or to cancel the existing policy.

Distributing Personal Belongings

Once the financial matters have been taken care of, the next step is to deal with the personal belongings that are left behind in the home. This can be a difficult task, especially if the belongings hold sentimental value.

The executor or heir will need to decide what to do with these items. One option is to have a family member or friend take possession of the items. Another is to donate the items to a charity. Or they can be sold and the proceeds distributed to the heirs.

When these items are taken care of, then the unwanted objects and clutter must be removed from the property before it can be sold.

Preparing To Sell the Home 

Once all of the financial responsibilities have been taken care of, the next step is to start getting the home ready to sell. This usually involves: 

Making Updates and Repairs 

If the home needs any repairs or updates, it is best to take care of these before listing the property for sale. This will make the home more appealing to potential buyers and may help you sell your home more quickly.

Some essential repairs and updates may include:

• Fixing any broken windows or doors;

• Replacing any worn-out flooring or tiles;

• Painting the walls and ceilings;

• Installing new fixtures and appliances;

• Repair any damage to the roof or exterior of the home.

It is also important to make sure that you are honest with potential buyers about any repairs that need to be done. This will help to avoid any misunderstandings or surprises down the road.

Appraisal and Inspections

The executor or heir will also need to have the property appraised and inspected.

An appraiser will look at several aspects of your house to help determine the value of the property. This is important because it will help to set the selling price of the home.

On the other hand, consider paying for an inspection for a more in-depth examination of the property. This is important because it can help to identify any potential problems that need to be repaired before the sale is finalized.

Without an appraisal or inspection, the executor or heir could be setting themselves up for a legal battle if the buyer decides to back out of the sale because of an issue that was not disclosed.

Disclosing Information 

When you’re selling inherited property, it is important to be upfront and honest with potential buyers. 

The executor or heir will need to disclose any information that could affect the sale of the property. Such as:

• If the property may need massive repairs;

• Deaths that have occurred in the property;

• If the property is subject to any legal disputes.

Disclosing this information will help you establish trust with potential buyers.

However, it is also important to note that disclosure requirements may vary from state-to-state so it is always best to check with a local real estate attorney before listing the property for sale.

For example, if you are considering buying a home in Charlotte or the state of North Carolina, you are not required to disclose a death that has happened in the home, however, they also state that the property owner must not knowingly omit or falsify any statements regarding the incident.

So as you can see, there are a lot of things to consider during a property sale after the death of a loved one. But by following these simple steps, you can make the process a little bit easier.

Additional Resources for Estate Planning 

Here are more resources to help manage the estate of a loved one who has passed away: 

• Estate Planning Info and FAQs - American Bar: Provides a comprehensive overview of the estate planning process. Which includes an introduction to wills, the lawyer's role, and more.

• The Ultimate Guide to Estate Planning - AARP:  Discusses in detail how to get started with estate planning.

• Estate Planning FAQs - American College of Trust and Estate Counsel: Provides a comprehensive resource on estate planning.

• Estate Planning Resources - American Civil Liberties Union: Provides a great resource to estate planning which includes sources for writing a will, attorney referrals, and more.

• An Introduction to Estate Planning - Office of Financial Readiness: Gives detailed information on what to do to complete your estate plan.

Grief and Loss Resources 

These are some of the resources that can help you through the grieving process: 

• What to Do After Someone Dies - National Institute on Aging: A comprehensive guide that covers what to do after someone dies.

• Grief and Loss Resources - American Counseling Association: Provides access to articles, courses, and more on grief and loss.

• Grief Resources - Hospice and Community Care: Provides access to information, videos, and more on grief.

• Grief Resources - Good Grief: Offers an extensive list of resources on grief to help with the grieving process, including book recommendations as well as tips and support.

• Helpful Websites for Grieving - Center for Grief Recovery and Therapeutic Services: Provides a list of helpful websites that can assist with the grieving process.