Overview

When a house is part of a matter under court jurisdiction — commonly a probate estate or a conservatorship/guardianship — you often must ask the court for authority to sell the property. The court’s role is to protect creditors and interested persons (heirs, beneficiaries, the protected person). The process requires petitions, notices, and usually a hearing. After the court authorizes the sale, proceeds can be used to pay the mortgage and other estate obligations, then distributed according to law or court orders.

Key Oregon law sources

• Probate and administration of estates (Oregon Revised Statutes, Chapter 111): https://www.oregonlegislature.gov/bills_laws/ors/ors111.html
• Guardianship and conservatorship statutes (Oregon Revised Statutes, Chapter 125): https://www.oregonlegislature.gov/bills_laws/ors/ors125.html
• Oregon Judicial Department — probate information and forms: https://www.courts.oregon.gov/programs/probate/Pages/default.aspx

Hypothetical facts used in this guide

For illustration: Alex is the appointed personal representative in a probate case for Jordan, who died owning a house with an outstanding mortgage. There is no living co-owner and Jordan did not have a trust. Alex wants to sell the house, pay off the mortgage from sale proceeds, resolve creditor claims, and distribute any remaining funds to beneficiaries.

Detailed answer — step-by-step process

1. Confirm the legal status of the property

First, determine whether the house is controlled by the court process at all. Common possibilities:

• It is part of a probate estate (decedent owned it in their name) — the probate court controls administration.
• It is owned by a revocable living trust — if so, most sales occur under the trust without court approval.
• It is subject to a conservatorship/guardianship (the protected person still legally owns it) — the conservator or guardian will often need court permission to sell major assets.

2. If probate applies, open the estate or confirm appointment

If no personal representative is appointed yet, someone must petition the probate court to open the estate and be appointed. If you are already the personal representative, verify your court-issued letters of authority before acting. See general probate rules: ORS Chapter 111 and the Oregon Judicial Department probate pages for local procedures.

3. Inventory, appraisal, and review of obligations

Prepare an inventory of estate assets and list liens and encumbrances, including the mortgage and its payoff amount. Obtain a market appraisal or broker price opinion so the court can evaluate whether the proposed sale price is reasonable.

4. Determine whether you need an order authorizing the sale

In probate or in conservatorship, the court generally must authorize sale of estate real property unless the governing instrument or statute gives the fiduciary clear, independent authority to sell. If the fiduciary lacks clear power, file a petition for authority to sell.

5. Prepare and file the petition for authority to sell

The petition typically asks the court to authorize specific sale terms. Include:

• A proposed purchase agreement or main terms (price, buyer identity if already under contract).
• An appraisal or comparable market evidence.
• Payoff figures for the mortgage and any other liens.
• A proposed distribution plan for net proceeds (pay debts, pay expenses, distribute to beneficiaries or place funds into estate account).

6. Give notice and set a hearing

After filing the petition, give required notice to heirs, beneficiaries, creditors, and other interested parties per court rules. The court will schedule a hearing where interested persons can object. The Oregon Judicial Department site lists probate notice and service procedures and local court rules: OJD probate information.

7. Court hearing and order

At the hearing, the judge reviews evidence (appraisal, contract, notice) and decides whether the sale is in the estate’s best interest. If approved, the judge issues an order authorizing the sale and specifying conditions (for example, sale free and clear of claims, or requiring confirmation). Keep a certified copy of the order for the closing.

8. Close the sale and pay the mortgage

Close the transaction in accordance with the court order. Use sale proceeds to pay mortgage payoff and closing costs first, as permitted by the order. After payoff, obtain and record a satisfaction or release of mortgage with the county recorder to clear title. Note: some closings require the personal representative’s attorney or the title company to provide the court order and letters of office to the title company or escrow.

9. File required documents and account to the court

After closing, file receipts, a closing statement (HUD-1 or equivalent), and accountings required by the court. The court will review distributions and, when appropriate, allow final distribution to beneficiaries and discharge the personal representative or conservator.

10. Address creditor claims and taxes

Use proceeds to satisfy valid creditor claims and any taxes (estate taxes, final income tax). Keep records and disclose payments to the court. The personal representative remains responsible for following creditor claim procedures under state law.

Timing, costs, and common delays

• Timeline: Simple cases with cooperative parties and no objections can take several weeks to a few months. Contested or complex estates can take many months.
• Costs: court filing fees, appraisal fees, title and closing fees, real estate commissions, and attorney fees if you hire counsel.
• Delays: beneficiary objections, unclear title, unpaid taxes, or multiple liens can slow sale and closing.

Practical checklist for the petition and closing

• Certified copy of letters testamentary/letters of administration or letters of conservatorship/guardianship from the court.
• Proposed purchase agreement or listing information.
• Appraisal or broker price opinion.
• Mortgage payoff statement and list of other liens.
• Proposed distribution of net proceeds.
• Proof of notice to heirs/beneficiaries and any required publication or mailing receipts.
• Draft court order authorizing sale (courts sometimes accept a proposed order to speed processing).

Helpful hints

• Confirm whether the property is in a trust. Trust property usually transfers or sells outside probate and often does not require court approval.
• Work with a title company familiar with probate or conservatorship closings in your county. They know local title requirements and recording steps.
• Get a formal payoff statement from the mortgage lender shortly before closing to avoid shortfalls.
• Provide clear notice to beneficiaries early. Many delays arise from surprise or missing notice.
• If the sale is time-sensitive (e.g., urgent cash needed to keep mortgage current), discuss temporary relief with the court or ask for expedited approval and short-term authority to maintain the property to prevent default.
• Keep a detailed paper trail of all receipts and disbursements; the court will require accounting.
• Consider consulting a probate/conservatorship attorney to prepare petitions and hearings. Courts expect legal formality in filings and notices.