Selling a Deceased Parent’s Home During Probate in Alabama

Detailed Answer

Short answer: Yes—often the estate (through the personal representative) can sell a decedent’s house while the estate is in probate in Alabama, even if there is a mortgage on the property. But the sale must be done under probate rules, the mortgage remains a lien until paid or assumed, and you typically need authority from the will or the probate court plus the mortgage lender’s cooperation.

Who has the power to sell the house?

When someone dies, the person named in the will as executor, or an administrator appointed by the probate court if there is no will, becomes the personal representative. That personal representative manages estate assets, including real estate. In Alabama, the probate court oversees estate administration. If the will expressly grants the representative power to sell real estate, the representative may sell the house under that power. If the will is silent, the personal representative will usually need the court’s approval (an order or confirmation) to sell real estate during probate.

What happens to the mortgage after the owner dies?

The mortgage does not disappear on death. A mortgage is a lien on the house and remains attached to the property. The lender has the right to be paid from the estate or to enforce the lien. Practical outcomes include:

• Payoff at closing: Most sales pay off the mortgage from the sale proceeds so the buyer receives clear title.
• Assumption or subject-to: A buyer may agree to assume the mortgage or buy the property subject to the existing mortgage, but many mortgages contain a “due-on-sale” clause allowing the lender to call the loan due on transfer. Lenders must be contacted and usually must approve an assumption.
• Short sale: If the mortgage balance exceeds market value, the lender may allow a short sale (accepting less than full payoff), but the lender must approve and often requires documentation from the personal representative and the probate court.
• Foreclosure risk: If mortgage payments are not kept current and the estate cannot pay, the lender may start foreclosure proceedings regardless of probate status.

Do you need probate-court permission?

Yes in many cases. If the will authorizes a sale, the personal representative’s documented authority (letters testamentary or letters of administration) plus compliance with relevant probate procedures may be enough. If the will does not authorize a sale, or if state probate rules require it, the representative will likely need a court order approving the sale. The probate court may require notice to heirs and creditors and may hold a hearing before granting authority to sell. For Alabama probate rules and more information about court oversight, see the Code of Alabama and the Alabama judicial branch resources: https://www.legislature.state.al.us/codeofalabama/1975/coatoc.htm and https://judicial.alabama.gov/.

Typical steps to sell the house during probate in Alabama

1. Identify the personal representative (executor/administrator) with letters from probate court.
2. Locate the mortgage documents and contact the mortgage lender to get a payoff statement and to learn about any due-on-sale clause or assumptions.
3. Check the will for sale authority. If the will grants power to sell, gather the representative’s letters and will language for the title company and lender.
4. If needed, file a petition with the probate court requesting authority to sell the property and request the court to set any required notices or hearings. The court may require advertising, notice to heirs, or confirmation of sale at hearing.
5. List and market the property. Disclose estate status. Buyers and title companies will want to confirm the representative’s authority and that liens will be cleared at closing.
6. Coordinate closing so sale proceeds first pay valid estate debts (including the mortgage payoff and closing costs). If the estate lacks cash to maintain mortgage payments before sale, communicate promptly with the lender to avoid foreclosure.
7. Record the representative’s deed (often an executor’s or administrator’s deed) clearing the mortgage lien when the lender is paid off or an assumption is recorded.

What if the estate can’t pay the mortgage or other debts?

If the estate is insolvent (debts exceed assets), the personal representative must follow Alabama’s probate procedures for paying creditors. Creditors, including the mortgage lender, generally have priority to be paid from estate assets. The representative may need a court-authorized sale to raise cash to pay debts. If the house is the only significant asset and it cannot cover the mortgage, there may be a short sale or lender foreclosure. Speak with a probate attorney quickly if the estate may be insolvent.

Practical issues buyers and sellers will face

• Title companies will require proof of the representative’s authority and proof that all required probate steps were followed before issuing title insurance.
• Lenders often require a certified payoff letter and documentation that the sale is authorized by the probate court or by the will.
• Sales can take longer than ordinary real-estate closings because of probate notice periods and potential court hearings.

For general information about probate procedure in Alabama, consult the Code of Alabama (Probate Courts provisions) and your local probate court. A starting point for Alabama statutes is the Code of Alabama table of contents: https://www.legislature.state.al.us/codeofalabama/1975/coatoc.htm and for court procedures see the Alabama Judicial Branch: https://judicial.alabama.gov/.

This article is educational and informational only and is not legal advice. Laws change and facts matter—consult a licensed Alabama attorney before taking action.

Helpful Hints

• Find the will and letters of appointment first. The personal representative’s letters are the basic proof of authority you will need.
• Contact the mortgage servicer immediately to get the current payoff figure and instructions for handling transfers or assumptions.
• Talk to the probate court clerk early to learn local filing, notice, and timing requirements for selling estate property.
• Keep mortgage payments current until the lender approves a short sale, the mortgage is paid at closing, or another arrangement is reached.
• Ask the title company what documentation they require (letters, court order, short-form affidavit, etc.) to insure title at closing.
• If the estate appears insolvent, get legal help right away—creditors’ rights and priorities can be time-sensitive.
• Document everything: communications with the lender, probate filings, and disbursements from sale proceeds.
• Consider a probate attorney experienced with estate sales and mortgage issues in Alabama to speed the process and avoid costly mistakes.

Reminder: This is general information only and does not create an attorney-client relationship. Consult a licensed Alabama attorney to apply the law to the specific facts of your case.