Short answer
Yes — you can often sell a decedent’s house while the estate is in probate in Colorado, but only when you have the legal authority to do so (usually as the personal representative or with court authorization). Any mortgage on the property remains a lien and must be paid or otherwise resolved at closing unless the lender agrees to a different arrangement (for example, loan assumption or a short sale). Colorado’s probate and property laws govern the process; see Colorado Revised Statutes, Title 15 (Probate) and Title 38 (Property) for the statutory framework.
How this works in plain language
When someone dies leaving a mortgaged home, the mortgage does not disappear. The mortgage lender still has a right to repayment because the loan is secured by the house. To sell the house you need authority to act for the estate. That authority normally comes through appointment as the decedent’s personal representative (executor or administrator) by the probate court. Once you have that authority, you can market and sell the property, but the sale proceeds will first be used to pay the mortgage and other valid debts of the estate.
Key legal references (Colorado)
- Probate powers and administration: Colorado Revised Statutes, Title 15 — Probate, Trusts, and Fiduciaries: https://leg.colorado.gov/colorado-revised-statutes/title-15-probate-trusts-and-fiduciaries
- Mortgages, liens, and property law: Colorado Revised Statutes, Title 38 — Property: https://leg.colorado.gov/colorado-revised-statutes/title-38-property
Common scenarios and what to expect
1. You are the personal representative
If the court appoints you as personal representative, you typically have authority to manage and sell estate assets. You must follow statutory duties (inventory assets, give notice to creditors, pay valid debts, and distribute remaining assets). If you sell the house, the mortgage is normally paid from the sale proceeds at closing so the buyer receives clear title.
2. You are not yet appointed
Until the court appoints a personal representative (or the property passed outside probate by a listed transfer method), you generally cannot sell the house. A buyer or title company will require proof of authority before closing.
3. The mortgage balance is higher than expected (short sale or deficiency)
If the sale price does not fully pay the mortgage, you’ll need the lender’s approval to complete a short sale. Lenders may accept less than the balance but often require documentation and sometimes a release of claims. If a short sale is not approved and the estate cannot pay off the mortgage, the lender may pursue foreclosure or a deficiency claim against the estate (subject to probate procedures).
4. A buyer wants to assume the loan
Many mortgages include a due-on-sale clause; the lender must approve any assumption. Even if a buyer assumes the mortgage, the lender will want to review credit and underwriting, and the estate may still have exposure if the loan documents do not allow assumption without release.
Typical steps to sell a mortgaged house during probate in Colorado
- Confirm whether the property passes outside probate (joint tenancy, TOD deed, trust). If it does, probate may not be necessary.
- Obtain appointment as personal representative from the probate court if needed.
- Secure the property and obtain an appraisal or broker opinion of value.
- Notify the mortgage lender of the death and request a current payoff statement and instructions for selling during probate.
- Provide required creditor notices and wait required periods under Colorado probate procedures.
- List and market the property; disclose the probate status to buyers.
- At contract and closing, use proceeds to pay the mortgage payoff and other estate debts. The title company will require proof of legal authority to sell and will handle payoff to clear the lien.
- File a final accounting with the probate court and distribute any remaining proceeds to beneficiaries per the will or intestacy rules.
Practical problems people often encounter
- Lender delays in issuing a payoff statement or approving a short sale.
- Disagreement among heirs or beneficiaries about selling or price.
- Insufficient estate funds to maintain the property (insurance, taxes, utilities) while waiting for probate resolution.
- Title issues or liens that must be cleared before sale.
Helpful hints
- Get appointed before listing. Title companies and buyers want documented authority.
- Contact the mortgage servicer early to get a payoff figure and to learn whether the loan can be assumed or modified.
- Work with a title company experienced in probate sales; they will usually handle lien payoffs at closing.
- If heirs disagree, consider mediation or ask the probate court for guidance — court orders can resolve disputes but add time and cost.
- Keep detailed records and receipts for property expenses — the estate may be reimbursed before distribution.
- If you expect the sale price to be less than the mortgage balance, start short-sale conversations with the lender as soon as possible.
- Consider hiring a probate attorney for complex situations (multiple liens, contested wills, possible creditor claims).
- Check whether a transfer-on-death deed, joint ownership, or trust might have already avoided probate — that changes the process entirely.
When you should get legal help
Talk to a Colorado probate or real estate attorney if:
- You are unsure whether you have authority to sell the house.
- The lender refuses a short sale or threatens foreclosure.
- Beneficiaries or heirs contest the sale.
- There are multiple liens or title problems.
An attorney can explain the probate timeline, seek court approval if needed, negotiate with lenders, and help protect the personal representative from liability.