What to do to determine who gets the sale proceeds from a deceased owner’s home

Detailed Answer — How sale proceeds are handled in New Mexico

If a home owned by your father is sold after his death, the sale proceeds can go to different places depending on how title was held and whether the property goes through probate. The basic path is:

1. First, clear title and pay secured claims (mortgages, recorded liens, property taxes, special assessments).
2. Next, pay estate administrative costs and valid creditor claims if the property is part of the decedent’s probate estate.
3. Finally, distribute any remaining funds to the person(s) who are entitled under the decedent’s will or under New Mexico’s intestate succession rules if there is no valid will.

Key points that determine where the money goes:

• How title was held: If the deed named your father alone, the home will usually be part of his probate estate. If title was held as joint tenants with right of survivorship, the co‑owner typically becomes sole owner automatically and sale proceeds go to that co‑owner. If the deed used a transfer-on-death (TOD) or beneficiary deed (if one was executed and valid), the named beneficiary may receive the property outside probate.
• Mortgages and recorded liens: The lender and any recorded lienholders are paid from the sale proceeds at closing. A title company or closing agent prepares a payoff demand and pays those amounts first.
• Probate administration: When the property is part of the probate estate, a personal representative (executor or administrator) collects sale proceeds into the estate account, pays debts and expenses, then distributes the remainder according to the will or intestate succession.
• Creditor claims and taxes: New Mexico law allows creditors to present claims against the estate. Valid claims and estate administration costs reduce the amount left for distribution.

New Mexico court self‑help pages explain the probate process and how intestate succession works; see the New Mexico Courts probate self‑help center for overview information: https://www.nmcourts.gov/self-help/probate/. For statutory text and to research specific probate statutes, use the New Mexico Legislature site: https://www.nmlegis.gov/.

Practical steps to find exactly where the proceeds will go

Follow these steps to get the exact breakdown for a particular sale:

1. Obtain the deed and title history. Search the county recorder/registrar of deeds for the deed and any recorded encumbrances (mortgages, liens, easements). County recorders keep the public record of deeds and liens.
2. Ask the closing/title company for the closing statement. The escrow or title company handling the sale must produce a settlement statement (itemizing payoffs: mortgage, recorded liens, taxes, title insurance, closing costs). That statement shows exactly where the sale proceeds are applied at closing.
3. Identify the estate’s personal representative. If the property is in probate, request a copy of the Letters Testamentary or Letters of Administration from the probate court; they name the personal representative who controls sale proceeds. The probate court clerk can tell you whether a probate case exists and supply public filings.
4. Check for probate filings online or at the court. Contact the district court clerk in the county where your father lived to see if a probate case is open. Probate dockets and filings show distributions, creditor claims, and final accounting when filed.
5. Request the estate accounting or distributions from the personal representative. The personal representative must provide an accounting to beneficiaries and the court showing money received and paid out from the estate. If you are a beneficiary, you have a right to information about the estate’s administration.
6. Search for unrecorded creditor claims or tax liens. Contact the mortgage lender(s) shown on the deed and the New Mexico Taxation and Revenue Department regarding outstanding property taxes: https://www.tax.newmexico.gov/.
7. If you can’t get answers, inspect probate court filings or consult an attorney. If the personal representative will not share a required accounting or the title company won’t give you a payoff breakdown, a probate or real estate attorney can request or compel the accounting or file motions with the court.

Common scenarios and how proceeds are handled

• Sale during probate: The personal representative sells the house. The title company pays secured liens and closing costs, then deposits proceeds to the estate bank account. The representative then pays valid creditors and distributes the balance per the will or law.
• Sale by a surviving joint owner: If the property passed automatically to a joint owner, that owner signs as seller and receives proceeds after lien payoffs and closing costs.
• Sale to satisfy debts: If the estate has more debts than liquid assets, the personal representative may sell property to pay creditors; proceeds go first to creditors, then heirs if anything remains.
• Small estate or nonprobate transfer: If New Mexico procedures allow collection of proceeds outside formal probate (for example, via small estate procedures or if a beneficiary deed exists), the named beneficiary collects funds after payoffs. Check the New Mexico Courts self‑help pages for small estate procedures: https://www.nmcourts.gov/self-help/probate/.

When to contact professionals

You should consult a probate attorney or real estate attorney if:

• The executor/personal representative refuses to provide an accounting or answer basic questions.
• You suspect improper disbursements, hidden liens, or creditor disputes.
• The ownership documents are unclear (e.g., possible transfer‑on‑death deed, trust, or joint tenancy issues).

Helpful Hints

• Get a copy of the recorded deed and any mortgages from the county recorder/registrar of deeds before the sale. That shows who has recorded interests.
• Ask the title/escrow company for the final settlement statement and payoff letter(s) — these documents show exactly who was paid and how much.
• Request the Letters Testamentary or Letters of Administration from the probate court to confirm who is authorized to collect and disburse proceeds.
• If you are a named beneficiary or heir, put your request for information in writing to the personal representative and keep copies.
• Document everything: keep copies of the closing statement, payoff demands, death certificate, will, and correspondence with the personal representative and title company.
• If you find something suspicious, ask for a court‑ordered accounting; the probate judge can compel disclosure and correct improper disbursements.
• Use official government resources: New Mexico Courts self‑help probate pages (https://www.nmcourts.gov/self-help/probate/) and the New Mexico Legislature site for statute research (https://www.nmlegis.gov/).

Quick checklist to request exact payoff breakdown

• Contact the closing/title company and ask for the final settlement statement (itemized).
• Ask for the payoff demand(s) sent to the lender(s) and the amount paid to each lienholder.
• If probate, request the estate accounting and copies of court filings that show distributions or receipts.

Disclaimer: This article explains general information about New Mexico procedures and is not legal advice. It does not create an attorney‑client relationship. For advice about a specific situation, consult a licensed New Mexico attorney who practices in probate or real estate law.