How to find out exactly where the sale proceeds from your dad’s house will go

Short answer: The parties who get paid from the sale depend on who owned the house, whether there are loans or liens, whether the house must go through probate, and whether a trust or beneficiary deed controls the transfer. At closing, title and closing agents first pay secured debts (mortgages, tax liens) and closing costs from the proceeds; any remaining money goes to the person or representative who is legally entitled to the property (surviving owner, trustee, or the estate), and then that person or representative distributes it according to the will, trust, or Iowa’s intestacy rules.

Detailed answer — step by step under Iowa law

1. Identify how title to the house was held

The first and most important step is to determine how the property was titled at your dad’s death. Common possibilities:

Owned solely in your dad’s name — likely part of his probate estate.
Owned jointly with right of survivorship (e.g., joint tenants) — typically passes immediately to the surviving joint owner(s).
Owned in a revocable trust — proceeds normally go to the trustee and avoid probate.
Transfer-on-death (beneficiary) deed — if Iowa recognized and the deed is valid, ownership passes directly to the named beneficiary on death.

How the house was titled usually controls who receives sale proceeds. To confirm title, get a copy of the deed recorded in the county recorder’s office where the property is located.

2. Determine whether probate applies

If the house was in your dad’s sole name and ownership does not pass automatically by joint tenancy, trust, or beneficiary deed, the property is usually part of the probate estate. Probate in Iowa is governed by the Iowa probate process and intestacy rules — see the Iowa Code and resources from the Iowa Judicial Branch for forms and procedures: https://www.legis.iowa.gov/law/iowaCode and https://www.iowacourts.state.ia.us/.

If a personal representative (executor) has been appointed by the probate court, that person controls selling the property and receiving the proceeds for the estate. If no probate has been opened, proceeds may be held until an appointment happens or a small-estate procedure is used where available.

3. Understand what must be paid out of sale proceeds at closing

At the real estate closing, the closing agent (title company or attorney) pays out in a standard priority order. Typical payees from the gross sale proceeds include:

Mortgage lender payoffs and any subordinate mortgages (secured debts recorded against the property).
Property tax prorations and unpaid real estate taxes.
Special assessments or tax liens.
Closing costs: title insurance, recording fees, escrow fees, and real estate broker commissions.
Mechanic’s liens or judgment liens that attach to the property if they were recorded.

After these obligations are satisfied, the net proceeds are distributed to whoever is legally entitled to the property (seller, surviving owner, trustee, or estate representative).

4. If sale proceeds go to the estate: how distribution works

If the house is part of your dad’s probate estate, the personal representative collects sale proceeds and first pays estate debts and administration costs. Only after valid debts, taxes, and costs are paid will remaining funds be distributed according to the will. If there is no will, Iowa’s intestacy rules (the statutory order for heirs) determine who inherits. For information about probate procedure and the responsibilities of a personal representative, see the Iowa Judicial Branch resources: https://www.iowacourts.state.ia.us/.

5. If the house passes outside probate (trust, joint tenant, beneficiary deed)

When property is held in a trust, owned jointly with survivorship, or transferred under a valid beneficiary deed, the transferee (trustee, survivor, or beneficiary) will receive the proceeds directly and is responsible for paying liens, taxes, and costs. These scenarios usually avoid probate and speed distribution, but recorded liens still must be cleared at closing.

6. Creditor claims and priority

Secured creditors (mortgage, tax liens) are paid from sale proceeds because their liens attach to the property. Unsecured creditors generally must make a claim against the estate during probate. If the estate does not have enough assets to pay unsecured creditors in full, those creditors may be paid only in part or not at all under Iowa probate rules.

7. Practical path to find out exactly where the money will go

Get a copy of the recorded deed at the county recorder to learn the owner(s) and type of title.
Ask the proposed closing agent (title company or real estate attorney) for the title commitment or preliminary title report and a draft closing statement. The title commitment lists recorded liens and who must be paid at closing.
If there’s a mortgage, request a payoff statement from the lender. That shows the exact payoff amount as of a date and how it will appear on the closing statement.
Ask the closing agent for an estimated settlement statement (HUD-1 or ALTA Closing Statement / Closing Disclosure) showing all payees and the net proceeds distribution.
If probate is involved, check with the probate court or the appointed personal representative for the estate’s status and likely distribution plan. The Iowa Courts website has public resources and contact information: https://www.iowacourts.state.ia.us/.
If you cannot obtain information or there are title disputes, consider ordering a full title search through a title company or hiring an attorney to review the documents and advise you on who is entitled to the proceeds.

Hypothetical example

Suppose your dad owned the house alone, had a recorded mortgage of $80,000, unpaid property taxes of $3,000, and the agreed sale price is $200,000. Typical closing payouts would be:

$80,000 to the mortgage lender (payoff).
$3,000 to the county for unpaid taxes.
$12,000 (approx.) to real estate broker(s) as commissions.
$1,500 to title/closing costs and recording fees.

Net proceeds (roughly $103,500) would then go to your dad’s estate. The personal representative would use that money to pay any other estate debts and administrative costs before distributing the remainder under the will or Iowa intestacy law.

Helpful hints — quick checklist to get exact answers

Get the recorded deed at the county recorder’s office — this tells you who owns the property and whether it was joint, in trust, or sole ownership.
Ask for a title commitment — it lists all recorded mortgages, liens, and exceptions that must be cleared at closing.
Request the lender’s payoff statement(s) and any statement for unpaid property taxes or assessments.
Obtain a draft closing statement from the closing agent before the sale; it shows each payee and the net distribution line by line.
If probate is required, look up the estate file with the county probate clerk or on the Iowa Courts website to see filings and who is appointed personal representative: https://www.iowacourts.state.ia.us/.
Keep records: copies of the deed, title commitment, payoffs, closing statements, and any court filings are essential.
If someone claims the proceeds belong to them (heirs, creditors, co-owners), do not allow distribution until a title search and, if needed, legal advice resolve the claim.
When in doubt, consult an attorney experienced in Iowa real estate and probate — they can read the title report and closing documents and explain the exact legal effect.

Where to find official Iowa resources

Iowa Code and statutes: https://www.legis.iowa.gov/law/iowaCode
Iowa Judicial Branch (probate resources and court contact information): https://www.iowacourts.state.ia.us/

When to get help from a lawyer: If the title is unclear, a will or trust conflicts with recorded title, there are competing claims, multiple liens, or complicated estate issues, it is wise to hire a lawyer. An attorney can obtain payoffs, review the title commitment and closing statement, and, if necessary, start or respond to probate proceedings.

Disclaimer: I am not a lawyer and this is not legal advice. This article explains general principles of Iowa property and probate practice to help you understand next steps. For advice about your specific situation, contact a licensed Iowa attorney.