Disclaimer: I am not a lawyer. This article explains general information about Georgia law to help you understand options and next steps. It is not legal advice. For help specific to your situation, consult a licensed Georgia attorney or the probate court in the county where the decedent lived.
Detailed Answer — Selling Real Property in Probate When a Mortgage Exists
Yes, you can often sell a decedent’s house during probate in Georgia, but you must follow the legal process. The key steps are: identify who has legal authority over the property, ensure that authority is documented, notify and work with the mortgage lender, and follow court rules if the sale requires court approval. The mortgage does not disappear at death; it remains a lien on the house until it is paid or otherwise discharged.
Who can sell the house?
Only the person with legal authority over the estate can sell estate property. That usually is the personal representative (called an executor if named in a will, or an administrator if appointed by the court). The personal representative must have official proof of authority, often called letters testamentary or letters of administration, issued by the probate court.
When does the personal representative get authority?
In Georgia, the probate court issues letters after the court accepts the will and appoints the personal representative, or when the court appoints an administrator if there is no will. The representative’s authority may be limited by the will or by court order. If the will expressly authorizes the sale of real property, that helps; if not, the representative may need court permission to sell.
Does the mortgage have to be paid before the sale?
The mortgage stays attached to the property. At closing, the lender will typically require payoff of the mortgage from the sale proceeds. The usual flow is:
- Seller (estate) lists the property and accepts an offer.
- A title company or closing attorney requests a mortgage payoff statement from the lender.
- At closing the mortgage is paid from the sale proceeds, the lender releases its lien, and the remaining proceeds stay in the estate to pay other debts and distributions.
If the house’s sale price is less than the mortgage, the sale will not fully pay the lender unless the lender agrees to accept less (a short sale) or the buyer agrees to assume the mortgage and the lender consents.
What if the mortgage balance exceeds the house value?
If the estate cannot pay the mortgage in full from sale proceeds, options include:
- Asking the lender to approve a short sale (lender accepts less than full payoff).
- Negotiating a loan assumption if the lender allows it.
- Allowing foreclosure if the estate cannot or will not continue payments and no sale is possible.
- Requesting court authorization to sell subject to mortgage or to sell at a price and treat the shortfall as an unsecured debt of the estate (the lender must agree to release the lien or proceed otherwise).
Do you need court approval to sell?
It depends. If the will grants the personal representative power to sell real estate, or if Georgia probate procedures or local court rules permit sales by the representative without a separate hearing, the representative can usually sell with the authority shown by letters. If the will is silent, or if the sale is unusual (for example, selling a homestead or selling when creditors contest), the representative may need to seek the court’s approval or a court-ordered sale.
What happens to sale proceeds?
Proceeds become estate assets. The representative must use estate funds to pay: (1) valid funeral and final medical expenses, (2) secured debts such as the mortgage, (3) administration expenses and taxes, and (4) valid unsecured creditor claims presented within the creditor claim period. After debts, remaining funds are distributed to heirs or beneficiaries under the will or under Georgia intestacy law.
Practical steps to sell an estate property in Georgia
- Locate the will and determine who is named personal representative.
- Open probate in the county where the decedent lived and obtain letters testamentary or letters of administration.
- Contact the mortgage lender early. Get a payoff amount and learn whether the loan has any due-on-sale or assumption restrictions.
- Get an estate appraisal or market analysis. Price the property realistically.
- If needed, petition the probate court for authorization to sell (provide notice to interested parties as required by the court).
- Work with a real estate agent experienced in estate sales and a closing attorney or title company familiar with probate closings.
- Use sale proceeds to pay off the mortgage at closing and follow probate accounting and distribution rules.
When probate can be avoided
Probate might not be required if the property was held with a right of survivorship (joint tenancy) or placed in a trust, or if ownership passes by beneficiary designation. If so, the property may transfer outside probate and the mortgage situation may be different. Confirm how title is held before starting probate or listing the property.
Relevant Georgia law and resources
Georgia probate law is found in the Official Code of Georgia Annotated (Title 53). Real property and mortgage rules appear in Title 44. For statutes and local probate procedures, check the Georgia General Assembly code and your county probate court rules:
- Georgia Code (Official Code of Georgia Annotated) — Georgia General Assembly: https://www.legis.ga.gov/
- Georgia Courts (probate and superior courts information): https://www.georgiacourts.gov/
Helpful Hints
- Get letters from the probate court before listing the property. Title companies will require them.
- Contact the lender early and get a written payoff figure and any instructions for payoff from an estate sale.
- Keep careful records of all estate receipts and disbursements. The personal representative has a fiduciary duty to the estate and beneficiaries.
- If sale proceeds likely won’t cover the mortgage, discuss short sale options with the lender and consult an attorney before agreeing to a price.
- If you are a beneficiary but not the personal representative, do not list or sign documents for the property. Only the representative has authority to sell.
- Consider hiring a Georgia probate attorney if the title is unclear, creditors dispute the debt, or multiple heirs object to the sale.
- Verify whether homestead protection, family allowance, or priority claims affect how sale proceeds must be used. The probate court can explain required notice and claim periods.
- Plan for timeline delays: probate, lender payoffs, and court approvals can add weeks or months before closing.
If you want, provide basic facts about how the home is titled and whether there is a will (without sharing private details). I can outline the specific next steps you should expect to take in Georgia and what documents you will likely need.