Can you sell your mother’s house during probate in Tennessee if there’s still a mortgage?

Short answer: Yes, it is often possible to sell a decedent’s house during probate even if a mortgage remains on the property, but you must follow Tennessee probate procedures, address the mortgage (the lender’s lien) and get the necessary authority from the court or under the will. The mortgage lien generally must be satisfied at closing (or otherwise resolved), and the personal representative must handle creditor claims and title clearance before distributing proceeds to heirs.

Detailed answer — how it works under Tennessee law

This section explains the typical steps, legal authority, and practical issues you’ll face when trying to sell a home owned by your mother while her estate is in probate in Tennessee.

1. Who can sell the house?

The person who can sell the house is the personal representative (sometimes called executor if named in a will, or administrator if appointed by the court). That person must have legal authority to act for the estate. If a will gives explicit authority to sell real estate, that may simplify things; otherwise, the personal representative will often need the court’s approval to sell real property. See Tennessee probate rules and the estate administration provisions in Tennessee law for more on letters of administration and the representative’s duties: Tenn. Code Ann., Title 30 (Probate & Estate Administration) and practical guidance from the Tennessee Courts: Tennessee Courts – Probate.

2. What happens to the mortgage lien?

A mortgage is a secured debt attached to the property. When the estate sells the house, the mortgage lien must be addressed at closing. Typical outcomes:

• Payoff at closing: Sale proceeds can be used to pay the mortgage payoff demand, and the lender releases its lien so title transfers free and clear to the buyer.
• Assumption or subject-to sale: A buyer may attempt to assume the mortgage or take the property “subject to” the mortgage, but most mortgage documents and lenders require their consent for assumption. Many lenders will require payoff or refinance.
• Short sale: If sale price is less than mortgage balance, the lender may agree to a short sale (accepting less than full payoff). The lender must approve any short sale and may require additional documents or releases.

Because the mortgage is a secured creditor claim against the property, the personal representative must treat the lender’s claim like other valid creditor claims in the probate process. See estate creditor procedures in Tennessee probate law: Tenn. Code Ann., Title 30.

3. Do you need court permission to sell?

Often yes. If the will explicitly grants power to sell real estate and that power is broad enough, the personal representative may be able to sell without separate court confirmation. If there is no express power, the representative typically files a petition to sell real property and obtains an order from probate court authorizing the sale or approving terms. The court’s involvement protects creditors and beneficiaries and helps ensure clear title for the buyer.

4. Timing and creditor priority

Mortgage lenders have a secured claim that is satisfied from the property’s sale proceeds before distributions to heirs. The estate must follow Tennessee creditor claim rules (notice, filing deadlines, and priorities). The personal representative must allow time for creditor claims and follow the probate timeline before making final distributions. See general probate administration guidance at the Tennessee Courts page: https://www.tncourts.gov/programs/probate.

5. Practical steps to sell during probate in Tennessee

1. Confirm status and authority. Make sure letters testamentary or letters of administration have been issued to the personal representative by the probate court.
2. Get a title search. Confirm the mortgage and any other liens or encumbrances, and determine if the property passes outside probate (e.g., joint tenancy or beneficiary deed) or through probate.
3. Contact the mortgage lender. Request a payoff amount and learn the lender’s requirements for payoff or assumption. Ask whether they will permit a short sale if necessary.
4. Decide sales process. If the personal representative has authority in the will, you may be able to list the property; otherwise petition the probate court for permission and for approval of sale terms if the court requires confirmation.
5. Market and negotiate. Get an appraisal or broker price opinion and market the property. If there’s a shortfall versus mortgage, negotiate with the lender in advance.
6. Close and satisfy liens. At closing, use proceeds to pay the mortgage payoff, closing costs, filing fees, and valid creditor claims. Obtain a release of mortgage or satisfaction recorded in the county land records so the buyer receives clear title.
7. Account and distribute. The personal representative should keep detailed accounting, pay valid claims, and distribute remaining proceeds to beneficiaries per the will or intestacy rules after court approvals and required waiting periods.

6. If sale cannot cover the mortgage

If the sale price is less than the mortgage balance, possible outcomes include:

• The lender accepts a short sale and releases the lien (may require a written agreement).
• The estate pays the deficiency from other assets (if available).
• The lender forecloses if payments aren’t kept current and no agreement can be reached. Foreclosure can proceed against the property; foreclosure law and timelines are separate from probate and the lender may pursue deficiency judgments subject to Tennessee law.

7. Practical complications to watch for

• Title issues: unpaid taxes, judgments, homeowner association assessments, or another lien may need payoff.
• Surviving occupants: homestead or family allowance rules or a surviving spouse’s rights can affect sale timing or occupancy.
• Insurance and maintenance: while the home is on the market, the estate must maintain insurance and upkeep to preserve value.
• Beneficiary disputes: disagreements among heirs may delay court approval or sale unless the court orders otherwise.

Helpful Hints

• Confirm who holds authority: don’t list or sign contracts until you have formal letters from the probate court showing you are the personal representative.
• Talk early with the lender: get a written payoff statement and ask whether the lender requires court order or specific forms at closing.
• Obtain a title report before listing: this reveals liens and easements that must be cleared for a successful sale.
• Consider court-ordered sale if heirs disagree: probate court can order sale and distribution even over objections in some circumstances.
• Keep thorough records: track all communications, payoffs, and court orders. The personal representative will need to account to the court and beneficiaries.
• Don’t leave payments behind: ensure mortgage payments, property taxes, and insurance remain current until closing to avoid foreclosure risk during probate.
• Consult a probate or real estate attorney: Tennessee probate and mortgage interactions involve procedural and substantive rules that affect liability and timing. An attorney can help petition the court, negotiate with the lender, and ensure a clean closing.

Where to find Tennessee statutes and official guidance

For the statutory framework on estate administration and the powers and duties of personal representatives, see Tennessee Code Annotated, Title 30 (Probate & Estate Administration): https://www.capitol.tn.gov/legislation/laws/30/. For practical probate process guidance from the state courts, see: https://www.tncourts.gov/programs/probate.

When to get professional help

If the mortgage is large relative to estate assets, heirs contest the sale, the lender threatens foreclosure, or you are unsure whether the personal representative has the power to sell, contact a Tennessee probate attorney early. An attorney can help obtain the correct court orders, communicate with the lender, and protect the personal representative from personal liability.

Disclaimer: This article is for general information only and is not legal advice. It does not create an attorney-client relationship. If you need advice about a specific situation, consult a licensed Tennessee attorney about your case.