It is a question that continues to be asked after a hundred years. My parent(s) have passed away, and I need to sell their home. How do I sell it?
FIrst, you should not try to do it alone. No matter how great the idea is, there may be hidden things wrong that you will be on the hook for if it is broken. These are called material facts, and can range anywhere from Lead Based Paint, to Roofing, to Electrical to Water and Sewer – you name it – even selling it as-is comes with a requirement for disclosures.
Second, most if not all of the properties are not ready to be put up for sale via the estate process. Also known as the probate process.
There are a few required steps to take to sell a house after the death of a parent. These steps will help make the process as creaseless as possible in an already troubling time.
1. Figure Out Estate Status In Probate
Just because you think you are the heir to your parent’s property doesn’t mean you’re able to take over their property as soon as they pass away. There are three ways your parents can leave you their house:
- Through the probate process (testate or what is called “The Last Will and Testimate”)
- Joint Ownership with Right of Survivorship (must be recorded at the courthouse)
- Via a living trust
- By transfer on a death deed
In no case should you automatically assume that the property is yours. You have mortgages, taxes, the Internal Revenue Service, and a plethora of others who stand in line before you. However, if you are the sole beneficiary, then you will need to go to an attorney and draw up a Quitclaim deed to transer the property in your name. But there are some hitches along the way.
Whether your parents have a will or not, the property you’re in line to inherit will have to go through the probate process, no matter what. This means a court or a clerk of superior court will oversee the distribution of your parent’s entire estate, preventing you from even cleaning out their home before the court identifies the executor of the estate, even if your parents named you as executor in their will. You will need to be sworn in.
The probate process going to court is standard and shouldn’t alarm you—the court oversees your ability to make sure your parent’s debts will be repaid before anything else happens. The probate process can take anywhere from a few months to a couple of years. Depending if you are the sole heir or you have siblings, as well as your debitors will determine the length. Additionally, North Carolina has a specific timeline in which you need to ask about. Some courts will also rule that the courts will have a say in how the property is sold, so hiring a probate attorney or a Certified Estate Specialist can help you navigate these steps.
A living trust is a document your parents must set up before they die, where they are the trustees, and you are named as the beneficiary. They have to be in sound mind and body when they do this to make it legal, otherwise it will be considered null and void bu the courts. This setup might ease any disagreements between remaining heirs, as the living trust allows the parent to determine who will be in charge of dividing out their estate.
When you inherit a house via a living trust, you might be able to avoid estate taxes. As a bonus, you’ll be able to sell the house immediately because you won’t have to go to court to have your parent’s assets distributed.
If your parents set up a transfer of their property to you via a death deed, also called a beneficiary deed, you will be able to take ownership immediately, without the need for probate court. With a death deed transfer, you can start clearing out your parent’s home and getting it ready for sale as soon as you’re ready.
A death deed is not an acceptable replacement for a will and does not hold merit in every state, so be sure to check on your state laws if you’re in a beneficiary deed situation.
2. Continue To Pay the Bills
Just because the owner of the home has passed away doesn’t mean all bills will cease. As long as the property is using electricity, you’ll have to pay utilities. You’ll want to keep the property insured and pay for any services like landscaping or cleaning that your parents might have used. If you won’t need these services as you prepare to sell the house, ensure there is no balance remaining, and inform the service providers about the change.
Along with paying bills, you’ll want to contact any creditors and financial institutions such as traditional mortgage or reverse mortgage lenders to let them know your parents have passed away. You’ll have to settle any debts that may be outstanding. The state might have laws about what debts absolutely have to be paid—some are low on the list of priorities and won’t need to be paid unless there is profit after the estate is settled.
Most commonly: Internal Revenue Service, State Department of Revenue, County Taxes, Mortgage Lender, then anyone else in order of their importance.
3. Gather All Documents
Paperwork is a necessary evil when it comes to settling your parent’s estate. You’ll have to find all of their important documents, such as:
If they have one, this will help streamline the entire process of settling their estate and selling the house. However, the will should not be executed until AFTER it has been read and filed in the Clerk of Court’s office in the County in which they lived.
If you can find receipts of bill payments, you’ll know what services to stop and what you need to continue paying until the house sells. You also want to keep track of the time, date, and any confirmation numbers you get so that if the cancellation does not happen, you then have a reference to give them on the next call.
Investment and Financial Documents
If your loved one had stocks, bonds, or other financial investments, you’ll need to contact the providers so you can close the accounts or transfer ownership. You’ll also need to find information for all of their open bank accounts so you can transfer the money or ownership once you get to that stage of the process.
In North Carolina, most of the companies you will call will require the Death Certificate and the Letters of Testimentary or Letters of Administation. These will give you Power of Attorney over all of the aspects of the accounts.
Your parents may have had insurance on themselves or their property, and you’ll need to find these documents so you can handle them accordingly. If they had personal insurance, you’ll have to contact the providers and find out what needs to be done to cancel the policy.
You’ll also want to find their home insurance policy because you’ll want to keep paying this until the house sells. You will still need to contact the insurance company to alert them about your parent’s death and see what steps might need to be taken to adapt the policy in the meantime.
After you find all the documents you need, you might want to go through personal documents and keep some for sentimental purposes. Anything you’re not keeping should be shredded or burned because names, social security numbers, or other identifying information will make it easier for someone to steal your loved one’s identity.
4. Home Security
If you’re not living in your parent’s home while you clean it and prepare it for sale, you’ll want to be very cautious about home security. The house will be sitting empty, and it might be a public record in your state that the owner’s death has been reported. This makes the house a perfect target for criminals and vandals. Keeping the house insurance policy active will help protect this major asset, but you might want to consider taking additional steps towards home safety when selling.
You don’t know who has keys to your parent’s home—they might have loaned them to neighbors, other family members, or service providers and forgotten to get them back. As the executor of the estate, you want to be sure that you are the only person who has access to the property. Change the locks as soon as you’re able, and keep track of any key you might loan out.
Change Mail Delivery
You want to make sure that you’re getting all mail that would have been delivered to your loved one. You might realize there are more people to contact or accounts to close based on what types of correspondence or bills they get in the mail. You can also contact companies who send junk or catalogs to stop that mail from being delivered.
Even if you go to your parent’s house every day to check the mail, it’s still a better idea to have it re-routed to your own residence. People might watch the house, knowing it’s empty, and rifle through the mail as soon as it’s delivered. You don’t want any important documents to be stolen from the mailbox.
Home Security System
Consider installing a home security system at your parent’s house. You can get a basic system that will call the authorities if someone tries to break in, just to have peace of mind. Or you can step up the service and get cameras installed. With this option, you can often monitor the cameras from your smartphone or computer to keep a closer eye on the property.
Though a security system will be an added expense, it will guarantee your parent’s property is secure, and it will only help resale value to have an alarm system already installed.
5. Update Insurance
You know that it’s important to keep paying home insurance to keep the property protected, but you need to make sure that you update all of the insurance information. Once you tell the insurance company that your parent has passed away, they’ll need to update the policy. If you plan to live in the home, update the policy with your information.
If you don’t plan to live on the property, you need to be honest with the insurance company and tell them it won’t be owner-occupied. If the property isn’t lived in, the premium might be higher because no one will be in the house to notice a leak or other problem. If you don’t tell the insurance company that no one will live in the house, you risk them not paying out if something is damaged on the property.
6. Remove Personal Items in the Home
You’ve already gone through the house to find all of the important documents. You’ve destroyed anything with personal information to prevent identity theft. Now you need to remove all of your parent’s personal items from their home. This process can take a long time, so you might want to do it in steps or by room.
Part of this is because you need to sort it out and assess what you or any other family members might want to keep for sentimental reasons. You can also divide out some things that you think are valuable and will want to sell later.
Mostly, you want to remove personal items so you can get the home ready to sell. Removing personal items will make the house look staged, which means it’s closer to being ready for potential buyers to come tour.
7. Get the Home Ready to Sell
All of the previous steps get you to the point where you’re finally ready to get your parent’s home ready for sale. This part is similar to if you were selling your own home, though your parent’s house may look more dated. Beyond clearing personal items to make the house ready to stage, you might need to make some minor updates.
If you’re handy around the house or simply want a project to keep your mind off of your grief, you can do some of the home improvements yourself. If you’d rather get everything off of your plate, you could attempt to sell the house as-is to a real estate investor.
Real estate investors factor in the renovations they’ll have to do to get the home in good condition, so you probably won’t make a profit, but the work will be out of your hands. Getting the house sold might be more important to your mental health, so it’s worth considering this option.
Contacting a real estate agent at this point will help you know what you need to do to get your parent’s home ready to sell. They can tell you if you need to upgrade the carpet, upgrade lighting fixtures, or give everything a fresh coat of paint. If you want to make improvements but don’t want to use a real estate agent, look at other homes for sale in the area and see how they look, and decide if you can make similar changes to your parent’s house.We Negotiated Discounts With Great Agents. Find One In Your Area.
8. Real Estate Agent or FSBO?
If you decide to hire a real estate agent to help sell the home, make sure they are a good agent that knows that they’ll be selling the home of a deceased person. The sale won’t be too different than a typical home sale, but some taxes, finances, and other details will come into consideration, and it would help to have an agent who has worked with this situation before.
You can sell your parent’s house on your own, but make sure you’re prepared to look at it as a business transaction. So much emotion is involved with wrapping up your parent’s lives that it’s affecting you even if you think you have it in check. Being so involved in selling their home might be the straw that breaks the camel’s back.
If you’re sure you want to sell your parent’s house on your own, you can list it for sale as For Sale By Owner (FSBO). You won’t have to pay a realtor any fees with this option, but all of the work will be solely on you. You’ll have to market the house, schedule showings, conduct tours, and handle the offers on your own. This might be too much stress on top of everything else you have to do.
Before you sell your parent’s house, you’ll also need to do your research. Check out homes for sale in the neighborhood and see what they went for. Make sure the property’s aesthetic and square footage are comparable. You don’t want to price the house too high and have it sit on the market for a long time. You also don’t want to undervalue the home and miss out on the money you may need to close out your parent’s estate.
9. Do You Have To Disclose The Death?
Disclosing a death that happened in a home or on a property varies from state to state, so you’ll want to check with state regulations first. If you’re using a realtor, they’ll know the laws for your state. In some cases, you don’t have to disclose the information in the house listing or upfront, but you have to be honest if a potential buyer asks.
In North Carolina, it is not a material fact if there was a death in the property. However, there are some debates as to if a particular method someone passed away should be communicated. Any item that is a material fact has to do with the physical property, anything that could stigmatize the property would not be considered disclosable information. Such as if the home was haunted, if someone had COVID, if there was high crime in the area. What we do recommend is if the property was used for a meth lab, that it should be disclosed.
If you are not in North Carolina, some states have a time limit on this information, such as if the death occurred in the last three years. Some states say you only need to disclose the death if it was the result of a violent crime, and your elderly parent peacefully passing away will not need to be revealed. Be sure to follow your state’s guidelines to prevent ruining a sale.