Selling a house you inherited in Texas: what the title company needs before it can close

The title company has to see who can sign the deed

To sell an inherited house in Texas, you first need records that show who owns it now, because a deceased owner cannot sign a deed and a title company will not insure a buyer until the chain of ownership is clear. Depending on whether there was a will and whether it was probated, that usually means letters testamentary from a probate court, a will probated as a muniment of title, or, when there was no will, a recorded affidavit of heirship that the title company agrees to accept. Talk to a probate attorney about which route fits your family, and call a title company early to learn exactly what it will require.

We at Capital Title see inherited properties regularly, and they are the files most likely to stall when nobody starts the paperwork until a buyer shows up. They are also very solvable. This guide is general information from the title side, not legal advice, and it is meant to help you ask better questions of your attorney and your escrow officer.

The first question: was there a will, and was it probated?

Almost everything flows from the answer. Texas offers several paths, and TexasLawHelp, a legal information site for Texans, describes them in plain language. These are the ones that come up most in title work.

• A will probated with an executor appointed: the court issues letters testamentary, which give the executor authority to transfer real property
• A will probated as a muniment of title: no executor is appointed, and the will and the court's order are recorded in the county deed records to show the new ownership
• No will, with real property in the deceased's name: heirs often use an affidavit of heirship recorded in the county where the property sits
• A small estate affidavit: limited, and for real property it transfers only the homestead and only to a surviving spouse or minor child
• Disputes or unknown heirs: an application to determine heirship in probate court, which generally requires a lawyer

When there is a will

If the will was probated and an executor appointed, that executor usually signs the deed on behalf of the estate. TexasLawHelp notes that letters testamentary are the court document that gives the personal representative authority to act, including transferring title to real property. We will want a certified copy of the letters and will check the probate file for anything that limits the executor's authority.

If the only thing that needs to move is real estate, families sometimes probate the will as a muniment of title instead. The judge signs an order admitting the will, and the will and order are recorded in the deed records. The beneficiaries named in the will then sign the deed to the buyer.

Timing matters. TexasLawHelp points out that, with very limited exceptions, a will must be filed for probate within four years after the date of death. If a parent died years ago and the will sits in a drawer, talk to a probate attorney soon, because the options narrow after that point.

When there is no will

When someone dies without a will and the estate is mostly real estate, Texas families often use an affidavit of heirship. According to TexasLawHelp, it is sworn by two witnesses who knew the deceased and the family history and who are not heirs or otherwise interested in the estate, and it is recorded in the deed records of the county where the property is located. It identifies the heirs; it does not, on its own, transfer title.

TexasLawHelp also notes that a title company will usually accept the affidavit to show the chain of title for a sale, but heirs should confirm with their title company. That is good advice. Each file is examined on its own facts, and we may ask for additional documents depending on the family situation, the debts and how long ago the death occurred.

In an heirship sale, every heir generally signs the deed, along with spouses when required. One heir who cannot be found, will not cooperate or is a minor can hold up the whole sale, which is why these files need the earliest possible start.

Recording the affidavit is usually handled by the family or their attorney, and recording fees vary by county. Have it reviewed by the title company before it is recorded if a sale is planned, so that any additional requirements can be met in the same step rather than by a second affidavit.

What slows these sales down

Inherited houses carry the same title issues as any other property, plus a few of their own. These are the ones I see most often.

A reverse mortgage deserves particular attention, because the lender will need to be paid at closing. Capital Title closes reverse mortgage transactions and has specialists, including lawyers, who address the title issues those loans raise, but the family should contact the loan servicer early to understand its requirements and timeline.

• Heirs who disagree about selling, or about the price
• An heir who lives out of state, cannot be located or has died since
• A mortgage or reverse mortgage on the property that needs a payoff and lender cooperation
• Property taxes that went unpaid after the death
• Liens or judgments against the deceased or against one of the heirs
• An earlier owner's estate that was never settled either, so there are two generations to clear

What to do while the paperwork catches up

Selling usually comes months after the death, and the house needs care in the meantime. Keep the property insured and tell the insurance company the owner has died, because a vacant house can affect coverage. Keep paying the mortgage, if there is one, and the property taxes. Secure the house, and keep a record of who has keys.

Gather the documents everyone will need: the death certificate, the original will if there is one, the deed showing how the deceased held title, recent mortgage and tax statements, and contact information for every potential heir. If you can find the deceased owner's own closing papers and title policy, bring those too.

Before you hire anyone to fix or empty the house, it is worth checking for liens in the records. My guide on finding liens before you sell explains how to search the county records yourself.

Resist the urge to sign a listing agreement or accept an offer before you know which route your family will take. A buyer can wait a few weeks for an heirship affidavit to be recorded; a buyer who learns halfway through the contract that probate has not been opened may walk away. Your agent, your attorney and your escrow officer can line up the timing so the contract and the paperwork arrive together.

What we ask for when we open the file

When a contract on an inherited house names Capital Title, we examine the records like any other file, then focus on the estate. Expect requests along these lines, and remember that your probate attorney prepares the court documents, not the title company.

Heirs who live far from Dallas do not usually need to travel. Signings can be arranged with a mobile notary or at another title office, and Capital Title has more than 100 branch offices across Texas. What matters is that we know early who will sign, where and when, so the documents are ready before the closing date.

• A death certificate for the deceased owner
• The probated will and court order, or letters testamentary, as certified copies
• A recorded affidavit of heirship, or a draft for review before it is recorded
• Identification and signing availability for every heir and any required spouse
• Payoff information for any loan on the property

Spouses, homesteads and community property

Texas is a community property state, and a home that was a married couple's homestead raises questions of its own when one spouse dies. A surviving spouse may have rights in the property that affect who must sign, even if the surviving spouse was not named on the deed. The Texas Department of Insurance lists a spouse or an unknown heir claiming ownership among the problems title insurance exists to address, which tells you how often these claims surface. Those questions are squarely legal ones, and they are exactly where a probate or estate planning attorney earns the fee.

If your family is still at the planning stage rather than the selling stage, an estate planning attorney's guide on what happens to a Texas family's house if there is no will explains why a will, or a transfer plan, makes this process far simpler for the next generation.

Start with a call, before you list

If you are planning to sell an inherited house in Dallas or the Park Cities, call our office at Preston and Lovers before you sign a listing agreement. Tell your escrow officer who died, whether there was a will, whether it was probated and who the likely heirs are. We cannot give legal advice, but we can tell you what we would need to insure a sale, so your attorney can prepare it while the house is being readied for market.

Once you are under contract, the rest of the process looks like any other closing. My guide on what the title company is doing for the next 30 days walks through the search, the commitment and the steps from contract to funding.

Questions people ask me