Selling an Inherited or Probate Home

Find Out Who Can Sign

Nobody can sign a contract to sell the house just because they are family. Who has authority depends on how your parent held the house:

• In your parent's name alone, with a will. The will names an executor. The probate court appoints them and the Circuit Clerk issues a document called letters of office, which title companies ask to see. Until then the executor can look after the house but cannot close a sale.
• In your parent's name alone, no will. The court appoints an administrator, often a close family member, and the house passes to the heirs Illinois law names.
• In a trust. The successor trustee usually sells without probate, following the trust's terms.
• Owned jointly, or with a transfer-on-death instrument. The house may pass to the surviving owner or the named beneficiary without probate.

If you are not sure which one applies, the deed and the will or trust answer it, and a probate attorney can tell you in one conversation. The weeks before the letters arrive are a good time to talk through the house itself, so the sale is ready to go the day the executor can sign.

Which Court Handles It

Illinois opens an estate in the county where the person who died lived, not where the house is. If they had no Illinois home, it is usually the county where most of their Illinois property sits. The estate's attorney confirms which.

For families in the Western Suburbs that usually means one of four courts. Each county's page on Probate Steps has the court, where to go and what the clerk needs:

If your parent lived somewhere else and owned the house here as a second home or rental, the estate usually opens where they lived, and the Illinois house may need its own proceeding here. The attorney will say.

Independent or Supervised Administration

Illinois has two ways to run an estate:

• Independent administration is the common one. The executor handles the estate, including selling the house, without asking the court to approve each step, and reports to the heirs rather than filing every accounting with the court.
• Supervised administration means the court approves major steps, including the sale of real estate, before they happen. It is slower and usually happens when someone asks for it, often because the heirs disagree.

Either way, the executor owes all the heirs a fair price. That is one reason executors want the house priced by someone who has actually walked it, in writing. I do that as a matter of course.

Look After the House in the Meantime

The weeks after a death are when houses get damaged and money leaks out. A short list:

• Tell the insurance company the owner has died and whether the house is empty. Many standard policies limit coverage once a house has been vacant for more than a set number of days. The insurer will say what the policy allows.
• Keep the heat on and the water safe. In a Chicago-area winter, a frozen pipe in an empty house is the most expensive mistake on this list.
• Keep paying the property tax installments and any mortgage. If the estate cannot keep up the mortgage, that is its own conversation: behind on a mortgage.
• Forward the mail and secure valuables and papers.
• Do not throw things out before the heirs agree on what stays and what goes.

More on this in the Probate Steps guide Looking After an Empty House.

Choose How to Sell

An estate changes the math. There is usually no mortgage, the carrying cost is split among heirs, and somebody has to manage whatever work gets done. There are two ways I sell an estate house:

Before you choose, you get both numbers in writing: what the house would bring listed, and what the investors would pay. Executors keep that comparison for the other heirs. Keeping the house in the family is a fine choice too, and the same numbers help that conversation.

When the Heirs Live out of State

Most families selling an inherited house in Illinois have at least one heir somewhere else. It is very workable:

• An executor does not have to live in Illinois, though the court may ask a nonresident executor to post a bond. The attorney handles that.
• Most of the selling can happen without being here. Listing paperwork is signed electronically, and closing documents can usually be signed ahead of time, by mail or with a mobile notary. The title company says what it accepts.
• Someone local needs to be the eyes. For showings, contractors and the final walk-through, that is either a local heir or me.
• Agree on the decision rules early. Who approves the price, who approves an offer, and how fast. Disagreements between heirs slow estates down more than courts do.

Taxes, in Plain English

This is not tax advice. Talk to the estate's accountant. But three things surprise most heirs:

• The tax basis usually resets. For federal income tax, inherited property generally takes its value on the date of death as its starting point, what the IRS calls a stepped-up basis. If you sell soon for about that value, there is usually little or no capital gain.
• Inherited property counts as held long-term, however soon you sell.
• Illinois has an estate tax, but it only reaches large estates. The estate's attorney or accountant will say whether yours is anywhere near the line.