Buying and selling real estate that is part of a probate or guardianship works a little differently than you might expect.
· If you’re a realtor, you need to understand the process so you can help manage your client’s expectations.
· If you’re a buyer, you need to anticipate that the process will move more slowly that you’re used to.
· If you’re a seller, you need to understand the steps you need to take as a personal representative of an estate or as someone’s guardian to ensure you have the right to sell the property and to minimize any title issues.
How to sell real property in probate:
In Oklahoma, there are two paths to selling real property owned by an estate. They both require a probate, but one is much more efficient than the other.
The easiest way to sell property in a probate or estate administration is through a Section 239 Sale. This is a reference to title 58, section 239 of Oklahoma statutes. This type of sale is preferable because it doesn’t require ongoing court oversight of the sale process. The personal representative can simply hire a realtor (if they choose), list the property, accept an offer, sign a contract, close, pay off any mortgage or liens, and take receipt of the proceeds.
Section 239 Sale
1. File a probate and set a date for an initial hearing.
2. At the hearing, the court will sign an order admitting a will to probate (if there is a will), identify the heirs at law of the deceased, identify any beneficiaries named in a will, and appoint a personal representative.
3. The personal representative can then file a petition asking the court for an order allowing the Section 239 Sale and must also file consents to the sale signed by all of the heirs and any beneficiaries named in a will.
4. If everyone consents to the 239 Sale, the court will sign the order allowing the personal representative to sell the property without any additional court oversight.
Non Section 239 Sale
The more complicated option is necessary when not everyone agrees to the Section 239 Sale or when not all the interested parties can be identified or located to even obtain consent. The non-239 Sale requires court oversight of the sale process.
1. File a probate and set a date for an initial hearing.
2. At the hearing, the court will sign an order admitting a will to probate (if there is a will), identify the heirs at law of the deceased, identify any beneficiaries named in a will, and appoint a personal representative.
3. The personal representative can then file a petition for sale of the property. A date will be set for a hearing, and notice of the hearing will be published in the local paper. If no one objects, the court will sign the order allowing the sale. If anyone objects, there maybe additional testimony or evidence presented about why the property should or should not be sold.
4. Assuming the court grants permission to sell the property, a notice of the sale must be published in the local paper instructing the public on whether the property will be sold in private sale, a public auction, or both. During this time, the personal representative can entertain offers.
5. If a potential buyer makes an offer, the personal representative must submit this offer to the court for approval. Another hearing will be set on the offer, with notice published in the local paper, allowing others to appear to either object to the offer or to offer even more than the potential buyer. Depending on how this hearing unfolds, the court will likely approve the offer and allow the personal representative to close on the property.
Obviously, the non-239 sale takes additional time and is subject to more opportunities for objections and delays. It can easily take 2-3 months. Because most parties to a sale anticipate the process of buying property will onlytake 30-45 days, it’s important to manage expectations.
How to sell real property in a guardianship:
Unfortunately, there is no option for a Section 239 Sale in a guardianship. Because the owner is still alive, it is impossible to identify heirs. Heirs can only be identified when a person has died. That is to say, no living person actually has “heirs.” We may be able to identify a spouse or children or parents or others, but those people do not become “heirs” until someone dies. Because a Section 239 Sale requires the consent of all a deceased person’s heirs, it’s simply not an option for a guardianship where the owner of the property is still alive.
That means selling property during a guardianship must follow the non-239 Sale prodedure. It will take extra time, cost extra money, and introduce a few complications. But it’s all in the name of respecting the rights of the owner and ensuring the owner receives fair market value for the property.
Getting the right advice:
· If you a realtor, we can meet with you and your team to explain the details of these steps so that you can manage the expectations of your clients and reduce or eliminate title complications.
· If you are a buyer, we can help you or your agent understand these steps so you can stay on top of the process.
· If you are a potential seller of property owned by a deceased or incapacitated person, we can represent you with the probate or guardianship court to ensure this process unfolds as efficiently and effectively as possible.
Here's the stuff we always put at the end: If you want to know more, we would love to talk with you. Best part, the conversation about how it could benefit you doesn't cost anything. Call us at (918) 770-8940, send an email to firm@tallgrassestateplanning.com.
Disclaimer: Reading this blog post does not create an attorney-client relationship, and it is not formal legal advice. This is for information purposes only. It is always best to speak with an attorney about your questions, assets, concerns, and needs.
