Detailed Answer
Short answer: In New Hampshire, selling real estate that belonged to a deceased person is often possible during probate, but you must follow the probate process, honor the mortgage lender’s rights, and usually have either the authority given in the will or court approval. The mortgage does not disappear simply because the homeowner died; it must be paid or otherwise resolved at sale.
How it typically works (step‑by‑step):
- Confirm how title passes. Determine whether the house goes through probate or passes outside probate. If the house was owned in joint tenancy with right of survivorship, held in a trust, or transferred by beneficiary deed, it may not be part of the probate estate. If it is part of the probate estate, the personal representative (executor/administrator) handles disposition under New Hampshire probate procedures. For general information on probate procedures in New Hampshire, see the New Hampshire Judicial Branch probate information: https://www.courts.nh.gov/.
- Establish who has legal authority to sell. A named executor in a will usually has some statutory authority, but some wills expressly grant or withhold power to sell real property. If there is no will or the will does not authorize sale, the appointed personal representative must seek court permission to sell estate property. The probate court supervises the administration and can issue orders authorizing a sale when necessary.
- Notify and work with the mortgage lender. An outstanding mortgage remains attached to the property. At sale, the mortgage must be paid off from sale proceeds at closing, or the buyer must assume the mortgage with the lender’s approval. If the estate lacks funds to fully pay off the mortgage, options include a short sale (lender approval required), creditor negotiations, or seeking court permission for actions that resolve the debt.
- Obtain court approval when required. Even when an executor has some authority, selling estate real estate often requires filing notices with the probate court or obtaining an explicit court order—particularly if beneficiaries object or the sale is not authorized by the will. The court will ensure the sale is in the estate’s best interest and that creditors’ claims (including the mortgage) are properly addressed.
- Complete the sale and close. At closing, the mortgage payoff is handled by the closing agent or attorney; the lender’s mortgage lien is paid off and released from the property. Any remaining proceeds go into the estate and are distributed according to the will or New Hampshire intestacy rules.
Example (hypothetical): Jane is appointed personal representative for her mother’s estate. The house is estate property with a $150,000 mortgage and a market value of $220,000. Jane either (a) sells the house, pays the lender $150,000 at closing from the sale proceeds, pays closing costs and estate expenses, then distributes the remainder to beneficiaries; or (b) if the market value is less than the mortgage, she negotiates a short sale with the lender or asks the probate court for directions. If Jane lacks authority in the will to sell, she gets a court order first.
Key legal realities under New Hampshire law you should know:
- The mortgage lender’s lien survives the decedent’s death and must be resolved at sale.
- The personal representative handles estate property but generally must follow the will’s terms and probate court supervision.
- Creditors (including mortgage lenders) have a right to file claims against the estate; those claims are paid from estate assets before distribution to heirs.
For statute-level resources and to research specific RSA provisions, use the New Hampshire Revised Statutes site: https://www.gencourt.state.nh.us/rsa/html/. For practical probate forms and local rules, visit the New Hampshire Judicial Branch: https://www.courts.nh.gov/.
When sale might be blocked or complicated:
- Co‑owners or beneficiaries dispute the sale and the court must resolve competing interests.
- The mortgage lender refuses to approve an assumption or short sale without a deficiency agreement.
- There are unresolved creditor claims or tax liens that must be cleared before clear title can transfer.
When a quick sale is easier:
- If the will expressly authorizes sale by the executor and no beneficiaries object.
- If the estate has sufficient funds to pay the mortgage payoff and funeral/administration costs so the sale proceeds can be cleanly distributed.
Practical next steps
- Obtain a certified death certificate and the will (if any).
- Check county land records to confirm how title is held.
- Contact the mortgage lender to get the current payoff amount and discuss options (payoff, assumption, short sale).
- Open an estate account and obtain appointment paperwork from the probate court to show you have authority to act.
- If authority is unclear, file a petition in probate asking the court to authorize a sale.
- Use a licensed real estate closing attorney or title company to coordinate payoff and closing.
Important note: Probate and real estate processes can vary based on facts—presence of a valid will, whether the property is community or separate property, the mortgage terms, and whether heirs agree. Local probate court procedures and forms matter.
Disclaimer: This article is educational only and does not constitute legal advice. For advice about a specific situation, contact a licensed New Hampshire attorney experienced in probate and real estate law.
Helpful Hints
- Before listing the property, get a mortgage payoff statement and understand estimated closing costs so beneficiaries won’t be surprised by net proceeds.
- Keep estate funds separate—open an estate bank account to receive sale proceeds and pay debts.
- If the mortgage balance exceeds the home’s value, talk to the lender about a short sale or deed-in-lieu; these require lender consent and often court involvement.
- Get a title report early to uncover other liens, judgments, or encumbrances that could delay sale.
- Document all communications with lenders, beneficiaries, and the probate court to protect the personal representative from later disputes.
- Consider mediation if beneficiaries disagree; courts may order a sale anyway, but mediation can save time and cost.
- Consult a New Hampshire probate/real estate attorney if creditor issues, lender disputes, beneficiary challenges, or complex tax questions arise.