Detailed Answer
Short answer: Yes — but only in certain circumstances. In Wisconsin the house does not disappear because your mother died. The mortgage lien remains attached to the property, and authority to sell depends on who holds title, whether a personal representative (executor/administrator) has been appointed, whether the will (if any) grants sale authority, and whether the estate has enough assets to pay debts. The lender’s mortgage must be addressed at closing (paid off, assumed, or otherwise dealt with), and some sales require court approval.
How it works in plain language
- When a person dies owning real estate in their name alone, that property becomes part of the decedent’s probate estate unless it passed outside probate (for example, joint tenancy with right of survivorship or a transfer-on-death designation).
- The mortgage is a lien on the house. The lender’s right to repayment survives the owner’s death. Selling the house usually requires satisfying the mortgage at closing so the buyer receives clear title.
- A court-appointed personal representative (often called an executor if named in a will, or an administrator if there is no will) has the authority to manage estate assets. That authority may include selling real estate, but the personal representative must act under Wisconsin probate rules and any instructions in the will.
- If the will explicitly authorizes sale, the PR may sell under that authority. If the will is silent or there is no will, the PR may need court approval or must follow statutory procedures before selling real property.
- If the estate will not cover debts (insolvent estate), the personal representative should consult the court and creditors’ claim rules before selling; sometimes a sale is necessary to pay creditors, but the PR must follow court orders and lien priorities.
Key legal sources and where to find them
Wisconsin’s probate laws and rules that govern personal representatives and estate administration are found in the Wisconsin statutes and in Court guidance. See the Wisconsin statutes and the Wisconsin Courts probate guides for details and local procedural requirements:
- Wisconsin Statutes (probate/decendents’ estates sections): https://docs.legis.wisconsin.gov/statutes/
- Wisconsin Courts — probate information and forms: https://www.wicourts.gov/courts/circuit/guide/probate/index.htm
Typical scenarios and what they mean
1) House owned solely by your mother, probate opened, personal representative appointed
The personal representative can often sell the house, but they must follow the statutory steps for administration and creditor notice. The mortgage lien remains; sale proceeds normally pay the mortgage off at closing. If the mortgage payoff is less than the sale price, the mortgage will be paid and any surplus becomes estate funds to distribute after other valid claims are paid.
2) House owned solely by your mother, but no personal representative appointed yet
You generally cannot sell until someone has authority. A buyer will want proof of authority (letters testamentary or letters of administration) and a clear title. If you need to sell quickly, you may petition the court for appointment of a personal representative or use any expedited local procedures the court offers.
3) House has mortgage and estate is insolvent
If sale proceeds won’t cover the mortgage and other estate debts, the lender can pursue foreclosure if the mortgage is not paid. The personal representative must follow creditor claim procedures and usually will consult the court about selling property to satisfy debts. Creditors are paid in priority order under Wisconsin law.
4) Buyer wants to assume the mortgage
Many mortgages have clauses that prevent assumption without lender approval. Even if the buyer agrees to assume the mortgage, the lender must approve the assumption or send an agreement. Without lender consent, the seller (estate) typically pays off the mortgage at closing from sale proceeds.
5) Homestead, surviving spouse, or family allowance issues
Wisconsin law recognizes certain protections for surviving spouses and minor children (for example, homestead right or family allowance), and those claims can affect the ability to sell or the distribution of the proceeds. The personal representative must consider those claims before distributing proceeds. See the Wisconsin Courts probate information for specifics: https://www.wicourts.gov/courts/circuit/guide/probate/index.htm
Practical steps to sell a house in probate with a mortgage in Wisconsin
- Confirm ownership and title: determine whether the home passed by will, joint ownership, beneficiary deed, or remains solely in the decedent’s name.
- Identify the personal representative: if none, petition the probate court to appoint one so there is legal authority to sell.
- Contact the mortgage lender early: request the payoff statement and ask whether the loan is assumable. If the buyer will assume, confirm lender approval process.
- Assess estate solvency: compile all debts and assets to see whether sale proceeds are needed to pay creditors or whether distributions to heirs are possible.
- If required, seek court approval for the sale: in some unsupervised or contested cases, the PR should or must get a court order authorizing the sale; follow local court rules and file the necessary petitions and notices.
- Disclose issues to buyers/agents: provide clear title information and any court filings that show authority to sell. Buyers will want title insurance; title companies typically require mortgage payoff at closing and evidence of the seller’s authority to convey the property.
- Close the sale: mortgage payoff occurs at closing from sale proceeds. If the payoff is less than the mortgage balance, resolve shortfall issues (lender agreement, deficiency handling, or estate insolvency procedures).
Common pitfalls to avoid
- Don’t list or sign sale documents without proof of authority (letters testamentary or court order).
- Don’t assume a lender will automatically let a buyer assume a mortgage.
- Don’t ignore creditor or surviving-spouse claims — they can block or complicate a sale.
- Don’t try to bypass probate by transferring title without proper notice or authority; that can create liability for the person who transfers property improperly.
Helpful Hints
- Get letters testamentary or letters of administration from the probate court before marketing the home. Most buyers and title companies require them.
- Ask the mortgage company for a written payoff and for written rules about loan assumption early in the process.
- Talk with a probate attorney early — small errors (wrong form, missed creditor notice) can delay or undo a sale.
- If the estate is insolvent, get court guidance before spending estate funds or selling the home; creditors must be handled in priority order.
- Consider listing the property with the expectation the mortgage will be paid at closing; most closings handle mortgage payoff out of sale proceeds through the title company or closing agent.
- Keep detailed records of communications with the lender, all receipts, and court filings.
- Check local county procedures — probate practice can vary by county, and local forms or timelines may apply.
Where to learn more and get forms
- Wisconsin Statutes and related laws: https://docs.legis.wisconsin.gov/statutes/
- Wisconsin Courts — probate information, guides, and local contact info: https://www.wicourts.gov/courts/circuit/guide/probate/index.htm
Next practical steps: If you are the likely personal representative, gather the will (if any), the death certificate, mortgage documents, and recent property tax and title records. Contact the probate clerk in the county where your mother lived to confirm filing steps and timelines. If the mortgage balance is large or family members disagree about selling, consult a probate attorney before listing the property.
Disclaimer: I am not a lawyer and this is not legal advice. The information above is a general explanation of how selling a house during probate commonly works in Wisconsin and is for educational purposes only. For advice about your specific situation, contact a licensed Wisconsin probate attorney or the local probate court.