Selling a probate property in Maryland can be a challenge, even for those familiar with the process. Such property belongs to a deceased person’s estate and requires court approval and supervision to sell.
If you are an executor or administrator of an estate, or an heir or beneficiary of a probate property, you might be wondering:
- What is probate and how does it affect selling real estate?
- Who has the power to sell the probate property?
- How does the probate process affect the sale of the house?
- Who is involved in a probate home sale?
- What are the common challenges and pitfalls of selling a probate property?
- What are the options for selling a probate property in Maryland?
In this guide, we’ll answer all of these questions and more.
By the end you’ll have understanding of how to sell a probate property in Maryland with minimal hassle.
We’ll also share with you some tips and advice from our experience working with probate properties in Maryland and through extensive hours of research.
By the end of this guide, you’ll have just about everything you’ll need to know about selling a probate property in Maryland.
Disclaimer: This blog post is intended for educational purposes only. As every real estate transaction is unique, Creo Home Buyers recommends you consult with a trusted advisor regarding your specific situation.
What Exactly is Probate and How Does it Affect Maryland Home Sales?
Probate is the legal process of settling the affairs of a deceased person.
The probate process in Maryland can take anywhere from 6 months to several years. The total length will depend on several factors, such as on the size and complexity of the estate, the presence or absence of a will, the cooperation of heirs, and the involvement of the court.
Going through probate involves:
- Filing the will (if there is one) with the court and submitting a copy of the death certificate
- Appointing an executor or administrator to manage the estate
- Notifying creditors and beneficiaries of the death
- Inventorying and appraising the assets of the estate
- Paying debts and taxes owed by the estate
- Distributing the remaining property to the heirs or beneficiaries according to the will or intestacy laws
- Closing the estate
The probate process can be expedited or simplified by choosing a small estate or a modified administration, obtaining consent from all interested persons, selling to a cash buyer, etc.
Here’s a video that explains the probate process in Maryland in 7 minutes:
What Happens to the Property in Maryland During Probate?
One of the main assets of a Maryland estate is usually the real property that had been owned by the person who has passed away and what type of estate planning they did.
What happens to the property during probate depends on how that property is titled in Maryland. We’ll discuss the three most common types of property titling in MD:
- Jointly owned with another person (such as a spouse or a co-owner)
- Titled in a trust or other entity (such as an LLC or a corporation)
- Solely owned by the deceased person
If the property is jointly owned with another person, it usually passes directly to that person without going through probate. This is called “right of survivorship.”
For example, if Bob and Alice own a house together as joint tenants with right of survivorship, and Bob dies, Alice automatically becomes the sole owner of the house without going through probate.
If the Maryland property is titled in a trust or other entity, it usually follows the rules and instructions of that trust or entity without going through probate.
For example, if Bob has a living trust that names Alice as his successor trustee and beneficiary, and Bob dies, Alice can take over the trust and its assets (including any properties) as a way to avoid going through probate.
If the property is solely owned by the deceased person, it usually goes through probate and becomes part of their estate in MD
If a property must go through probate then that means its subject to:
- Being frozen until an executor or administrator is appointed by the court or named in the will
- Being secured, maintained, insured, etc. by the executor or administrator
- Being appraised by a qualified appraiser
- Being sold by the executor or administrator with court approval
- Being distributed to the heirs or beneficiaries according to the will or intestacy laws
In this guide, we’ll focus on how to sell a property that is solely owned by the person who has died and must go through the probate process in Maryland.
Who Has the Power to Sell the Probate Property in Maryland?
The person who has the power to sell probate property in Maryland is the executor or administrator of the estate. Also known as the personal representative.
An executor is a person who is named in the will to manage the estate. An administrator is a person who is appointed by the court to manage the estate if there is no will or no executor.
The executor or administrator has the authority and responsibility to:
- File the will with the court
- Obtain letters of administration that grant them the power to sell the property
- Work with a probate attorney and a real estate agent
- List and market the property for sale
- Negotiate and accept offers from buyers
- Petition the court for approval to sell the property
- Close the sale and distribute the proceeds
The executor or administrator must act in good faith and in the best interest of the estate and its beneficiaries. They must also follow the rules and procedures of the probate court, any court hearings, and the laws of Maryland.
How Does the Probate Process Affect the Sale of the House?
The probate process affects the sale of the house for both you and potential buyers in several ways, such as:
- Requiring court approval: The executor or administrator must obtain court approval before selling the property. This involves publishing a notice of sale, inviting higher bids, obtaining court confirmation, etc. This can add time and cost to the that of a typical property sale process.
- Following specific rules and procedures: The executor or administrator must follow specific rules and procedures for selling the property, such as using a standard purchase contract, depositing earnest money in an escrow account, disclosing material facts or defects, etc. This can limit their flexibility and options in the MD home sale process.
- Involving multiple parties: The executor or administrator must involve multiple parties in the sale process, such as heirs, beneficiaries, creditors, buyers, agents, attorneys, appraisers, inspectors, etc. This can complicate and delay the sale process.
Who is Involved in a Maryland Probate Sale?
Selling a Maryland probate property involves several parties, each with their own role and interest in the sale process. Here are some of the main parties involved in a probate sale:
Executor or Administrator: Who is Responsible for Selling the Property?
The person who is responsible for selling the property is the executor or administrator. The executor is either named in the will or appointed by the court to manage the estate in Maryland.
For any real property in Maryland the executor must sell the property with court approval and distribute the proceeds to any heirs or creditors.
Probate Court: How Does It Affect the Sale of the Property?
The probate court is the court that oversees and approves the sale of the property in Maryland. This court has the power and responsibility to:
- Confirm the validity of the will or appoint an administrator if there is no will
- Grant letters of administration to the executor or administrator
- Review and approve the inventory and appraisal of the estate assets
- Review and approve the sale price and terms of the property
- Resolve any disputes or objections that may arise from the sale
The probate court in Maryland also has specific rules and procedures that must be followed by the executor or administrator and other parties involved when selling a house in probate.
Heirs and Beneficiaries: What is Their Role in the Sale Process?
The heirs and beneficiaries are those people who inherit the property or a share of it through the will or Maryland intestacy laws.
Heirs have rights and interests in the selling process:
- Must be notified of the death and the probate proceedings
- Are entitled to a copy of the will and an accounting of the estate assets
- Able to consent, object, or request a partition of the property
- Can contest the will or challenge the executor or administrator
- Receive their share of the proceeds from the sale
The heirs and beneficiaries can influence or delay the sale process depending on their cooperation or conflict with each other and with the executor or administrator.
Real Estate Agents: Do You Need One to Sell Your Probate Property in MD?
No. You don’t need a real estate agent in order to sell a property in probate in Maryland.
Real estate agents are professionals who can help you sell your probate property on the market. They can price and stage your property, market and advertise it to buyers, schedule and host showings and open houses, negotiate and accept offers, and prepare and finalize all the paperwork and documents for closing.
Real estate agents can provide you with many benefits, such as more exposure to buyers than you might have on your own. They can also help you navigate the probate home sale process in MD. However there are some downsides, such as hefty commission fees and no guarantee when the house will sell.
If you decide to hire a real estate agent, you should make sure you choose a qualified and experienced one who specializes in with home sellers dealing with probate sales in Maryland.
Common Challenges and Pitfalls of Selling a Probate Property
There are many potential problems or pitfalls that can arise when you need to sell an inherited house in Maryland:
Outstanding Debts and Liens: What You Need to Know
One of the common challenges when trying to get property in probate sold is dealing with any outstanding debts or liens against the Maryland real estate.
Debts are any money that the deceased person owed to creditors, such as credit cards, loans, bills, taxes, etc. Liens are any legal claims that creditors have on the property as a security for the debts, such as mortgages, judgments, tax liens, etc.
Debts and liens can affect the sale of the property in several ways, such as:
- Reduce the equity: They can reduce the amount of money that you can get from the sale after paying off the debts and liens.
- Delay the sale: They can delay the sale until you clear them or negotiate with the creditors.
- Prevent the sale: They can prevent the sale if you cannot clear them or if they exceed the value of the property.
Any outstanding debts and liens on the property will have to be identified and resolved before it can be sold.
A Maryland probate attorney can assist with this process by:
- Checking the credit report of the deceased
- Searching for any public records of liens on the property
- Contacting any creditors or lienholders and requesting payoff statements
- Paying off any debts or liens with funds from the estate assets
- Obtaining releases or satisfactions of any debts or liens
Property Insurance: Do You Need It During the Probate Process?
Another common challenge of selling a probate property is maintaining property insurance while the property waits to be sold. Property insurance is a type of insurance that covers your property from any damage or loss caused by fire, theft, vandalism, natural disasters, etc.
If there is a mortgage on the property, the lender will most likely require that a property insurance policy remain active until the property changes hands.
Leaving the Home During Probate: Pros and Cons?
Leaving the home during probate means vacating the property and securing it until you sell it. Staying in the home during probate means living in the property and maintaining it until you sell it.
There are pros and cons of leaving or staying in the home during probate, such as:
Staying in the home can cause you emotional stress, conflicts with other heirs, and access issues for buyers and agents. However, leaving the home can cost you money for moving and expose the property to risks of vandalism or theft if the property is left vacant.
You’ll have to decide whether to remain in the property during probate based on your preference and situation.
Selling the House in Probate Without a Will: What Happens?
A will is a legal document that expresses the wishes of the deceased person regarding how their property and assets should be distributed after their death.
If the deceased person left a will, the probate process is usually easier and faster because the will:
- Names an executor who can manage the estate and sell the property
- Specifies the heirs or beneficiaries who inherit the property or a share of it
- Provides instructions and guidance on how to handle any issues or disputes that may arise from the sale
If the deceased person did not leave a will, the probate process is usually harder and longer because:
- The court has to appoint an administrator who can manage the estate and sell the property
- The state intestacy laws determine the heirs or beneficiaries who inherit the property or a share of it
- There is more room for confusion and conflict among the heirs or beneficiaries who may have different opinions or preferences about selling or keeping the property
You can sell the house in probate without a will by obtaining letters of administration from the court that grant you the authority to sell the property. Then you simply go through the probate process in order to sell.
Handling the Sale as a Representative of the Estate: What are Your Duties?
As a representative of the estate in Maryland, you have a fiduciary duty to act in good faith and in the best interest of the estate and its beneficiaries.
This means that you have to do the following things as a representative of the estate: keep accurate records and receipts of all your actions and transactions; report to the court and provide an accounting of all your activities and expenses; comply with all the legal requirements and procedures for selling the property; and protect yourself from any liability or risk that could arise from the sale.
You can handle the sale as a representative of the estate by:
- Hiring professionals, such as probate attorneys, real estate agents, appraisers, inspectors, etc. to help you with the sale process
- Communicating and cooperating with all parties involved in the sale, such as heirs, beneficiaries, creditors, buyers, agents, etc.
- Avoiding any conflicts of interest or self-dealing that could get you into legal trouble
Ways to Sell a Probate Property in Maryland
Selling a probate property in Maryland can be done in different ways, depending on your goals, preferences, and situation. Here are some of the options for selling a probate property in Maryland:
List the Property on the Real Estate Market
Selling a probate property on the real estate market in Maryland is an option that can give you a higher sale price, more control, and more time. However, it can also cost you more money, take longer, and cause more hassle and stress. You have to prepare, list, market, find buyers, negotiate, accept offers, and close the sale yourself or with a Realtor. You should consider the pros and cons of this selling option before choosing it.
Sell the Property to a Real Estate Investor
Selling a probate property to a real estate investor in Maryland is an option that can save you time and money and help minimize selling hassle and stress. However, you may not be able to get full market value for your home. You should make sure you find and vet a legitimate and trustworthy Maryland property investor who can offer you a fair and transparent deal.
Sell the House Directly to a Cash Buyer
A cash buyer is a person or company who can buy your property with cash and without any financing or contingencies. You have to find and contact a legitimate and trustworthy cash buyer, receive and accept a cash offer, sign and complete the paperwork, and receive the cash payment and transfer title.
Auction the Real Estate at a Probate Sale
Selling a probate property at a probate sale in Maryland also has its pros and cons. A probate sale is an auction by the court or the estate representative. It is different from a regular sale. You’ll need court permission, notice of sale, bids from buyers, court confirmation and approval, and then you’ll be able to transfer the title.
Sell the Home to Family Members or Heirs
Selling a probate property to family members or heirs in Maryland can have pros and cons. They are the people who are related to the deceased person or who inherit the property or a share of it. You need to contact them, agree on a price and terms, get consent or agreement from others, do the paperwork, and get the payment and title transfer.
You can sell your property fast and easy to someone who cares about it or keep it “in the family,” but you may get a lower price, lose value or appeal, and face emotional or legal issues. You should communicate and cooperate with them and others to minimize conflicts.
How to Avoid Common Pitfalls When Selling a Probate Property
Selling a property in probate in Maryland can be risky and tricky. There are many common pitfalls that can occur during the sale process, such as:
- Title issues: Problems or defects that affect the ownership or transfer of the property, such as missing heirs, forged documents, liens, etc.
- Disputes among heirs: Conflicts or disagreements that arise among the heirs or beneficiaries who inherit the property or a share of it, such as contesting the will, requesting a partition, objecting to the sale, etc.
- Frauds or scams: Dishonest or illegal schemes or actions that target the sellers or buyers of the probate property, such as fake buyers, fake agents, fake documents, etc.
To avoid or overcome these common pitfalls, you should do the following things: check and clear the title of the property, communicate and cooperate with all the heirs or beneficiaries, and find and vet legitimate and trustworthy buyers, agents, and professionals. You can also seek professional help or advice when needed from probate attorneys, real estate agents, appraisers, inspectors, etc.
FAQs About Selling a Probate Property in Maryland
Here are some of the frequently asked questions (FAQs) about selling a probate property in Maryland:
What is a Probate Sale in Maryland?
A probate sale is a court-approved and supervised sale of a property that belongs to a deceased person’s estate. It can happen when the property needs to be sold to pay debts, taxes, or distribute assets among heirs, and it can be different from a regular sale in terms of process, rules, requirements, and timeline.
How Long Does the Probate Process Take in Maryland?
The probate process in Maryland can take 6 months to several years depending on the complexity of the estate. The process can be expedited or simplified by choosing a small estate or a modified administration, obtaining consent from all interested persons, selling to a cash buyer, etc.
Do I Have to Appraise the Property Before Selling?
Yes, you usually need to have an appraisal of the property before selling it in a probate sale. An appraisal will help to determine its fair market value and potential sale price, and to satisfy the court’s requirement that the property is sold for a certain percentage of its appraised value.
If you need to have the property appraised, you’ll need to find a qualified and licensed appraiser in Maryland to appraise the property and provide an appraisal report.
What Are the Closing Costs for Selling a Probate Property?
The closing costs for selling a probate property are similar to those for selling a regular property, but they also include some additional fees, such as probate fees, attorney fees, executor or administrator fees, etc. They can vary depending on the value and condition of the property, the type of sale, the type of buyer, etc. They are usually paid from the proceeds of the sale before distributing them among heirs or creditors.
Do I Need a Probate Attorney to Sell a Probate Property in Maryland?
Hiring a probate attorney to sell a probate property in Maryland is not mandatory, but it is highly recommended. A probate attorney can help you navigate the probate process, comply with the legal requirements and procedures, protect your interests and rights, and negotiate and communicate with other parties involved in the sale.
Sell Your Maryland Probate Property Fast for Cash
Selling a probate property in Maryland can be challenging process. It involves going through the probate process, getting court approval, and dealing with multiple parties and real estate professionals. This guide was intended to help with navigating the process of selling real estate facing probate in Maryland.
If you decide to opt for a FSBO Maryland home sale for your probate property and would like to receive a free, no-obligation cash offer, feel free to contact us anytime. Fill out our offer form and we’ll get back to you soon.
Thank you for reading this guide. We hope it has been helpful and informative. We look forward to hearing from you soon.