FAQ: How do I get court approval to sell a house and pay off the mortgage in Virginia?

Short answer: If you are the personal representative (executor/administrator), guardian, conservator, or a party with an interest in a decedent’s estate or an incapacitated person’s property, you generally must confirm whether your document (will, trust, or appointment order) gives you authority to sell real estate. If it does not, you must petition the Circuit Court for a court order (a license or authorization) to sell the property. The court process includes preparing a petition, notifying interested parties and creditors, attending a hearing, and recording the court order before closing. After closing, use the sale proceeds to pay the mortgage and other debts in the order required by law.

Detailed answer — step‑by‑step under Virginia law

Below is a practical, stepwise plan framed around a common hypothetical: a decedent died owning a house that still has a mortgage, and you are the personal representative charged with settling the estate.

1) Identify your role and your written powers

Determine whether you are a personal representative (executor named by will or administrator appointed by the court), a trustee, guardian, or conservator. Review the will, trust, letters testamentary/letters of administration, or the court’s appointment order to see if it expressly authorizes the sale of real property.

If the will or trust grants explicit power to sell, you may have authority to sell without additional court permission. If the document is silent or you are an administrator or guardian/conservator, you will usually need court approval before selling estate property.

Virginia’s statutes governing wills, probate, guardianship, and administration are found in Title 64.2 of the Virginia Code: Va. Code Title 64.2.

2) Confirm estate debts and why a sale is needed

List the estate’s assets and debts. If the estate cannot pay creditor claims or satisfy liens (including the mortgage) from cash or other liquid assets, a sale of the real estate may be necessary to pay mortgage arrears, secured claims, and administration expenses. Courts favor methods that protect creditors and beneficiaries.

3) Prepare and file the petition (petition for license to sell)

File a petition in the Circuit Court of the county or city where the property sits. The petition should state:

• Your role (personal representative, guardian, etc.) and attach or reference your letters or appointment order.
• Description and address of the property.
• Why sale is necessary (to pay mortgage, creditors, estate administration costs, or to distribute proceeds).
• Any steps taken to value the property (appraisal or market analysis) and the proposed method of sale (public auction, sealed bids, or private sale through a real estate broker).
• Proposed sale terms, including whether you request authority to pay off the mortgage and other liens at closing.
• Request for court order authorizing the sale and any requested powers (e.g., authority to sell at private sale, to execute deed, to pay mortgage payoff and closing costs, or to compromise liens or claims).

4) Provide notice to beneficiaries, heirs, and creditors

Virginia law requires notice to interested parties. The petition must be served on known beneficiaries, heirs at law, and secured creditors (including the mortgagee). The court may also require publication for unknown creditors. Timely notice gives parties a chance to object before the court signs the order.

5) Attend the hearing and obtain the court order

The court schedules a hearing. Bring evidence of value (appraisal or broker’s opinion), the mortgage payoff statement, and copies of notices. If no one objects, the judge may enter an order authorizing the sale and specifying any conditions (sale method, minimum price, and ability to pay mortgages and closing costs). If someone objects, the court resolves the issues at the hearing.

6) Sell the property and close

Proceed with the approved sale method. At closing, the deed conveying title typically references the court order as authority to sell. The closing agent or title company will obtain a mortgage payoff statement and arrange payoff from sale proceeds. After payoff, ensure you get a release or satisfaction of mortgage recorded.

7) Account to the court and distribute proceeds

After closing, prepare the required accounting for the court and beneficiaries showing sale proceeds, mortgage payoff, closing costs, commissions, taxes, creditor claims paid, and any remaining balance for distribution. File any post‑sale reports the court requires.

8) Special situations to watch for

• If the sale price is below appraised value or below the amount needed to satisfy creditors, the court will scrutinize the sale more closely and may require additional findings.
• If there are multiple mortgages or liens, the order should address priority and payoff sequence.
• If property is jointly owned or held in a trust, you may not need probate court approval; instead, follow the title/ trust terms.
• If the mortgage holder objects (for example, to a short sale), negotiate payoff terms and obtain lender agreement; the court often approves sales contingent on lender consent.

Hypothetical example (short)

Jane is named executor. The decedent’s home has a $120,000 mortgage and little cash in the estate. Jane files a petition in the Circuit Court asking for a license to sell the house to pay the mortgage and estate debts. She attaches an appraisal, serves the beneficiaries and the mortgagee, and requests authority to sell via broker. The court holds a hearing, grants the license, and permits Jane to pay the mortgage at closing. The sale closes, the title company pays off the mortgage, records the deed and the lender records a mortgage satisfaction, and Jane files her accounting and distributes remaining funds to the beneficiaries.

Statutes and resources

• Virginia Code, Title 64.2 (Wills, Trusts, and Administration of Estates): https://law.lis.virginia.gov/vacode/title64.2/
• If you are handling a guardianship or conservatorship matter, see the guardianship provisions within Title 64.2 for procedures and required court approvals: https://law.lis.virginia.gov/vacode/title64.2/

Helpful Hints

• Start early: getting appraisals, payoff statements, and serving notices takes time.
• Get a written payoff statement from the mortgage lender before listing. Payoff amounts change daily with interest.
• Keep detailed receipts and records; the court will expect a clear accounting of sale proceeds and payoffs.
• If the estate is likely insolvent (debts exceed assets), consult the court clerk about creditor notice and priority rules before selling.
• If the mortgage lender will accept a short sale, get any lender agreements in writing and present them to the court as part of the petition or at the hearing.
• Use a title company or closing attorney experienced with probate sales to make sure deeds, satisfactions, and recordings are done correctly.
• Consider hiring an attorney for contested matters, complex lien situations, or when large sums or family disputes are involved.

Disclaimer: This article explains general Virginia procedures and is for educational purposes only. It is not legal advice. For advice about your specific situation, consult a licensed Virginia attorney.