Selling a House in Probate: An Austin Real Estate Guide

Losing a loved one is never easy. When you add the responsibility of managing their estate to the mix, the emotional toll can feel overwhelming. If you’ve been named an executor or administrator in Austin, you might be staring at a pile of paperwork and a house full of memories, wondering where to even begin.

You aren’t alone in this. While the legal jargon can sound intimidating, the goal is actually quite simple: legally validate the estate so you can distribute the assets to the heirs.

The good news is that Texas has one of the most streamlined probate processes in the country. As a local real estate professional, I’ve walked many families through this. This guide will break down the numbers, the timeline, and the “gotchas” of selling a probate property in the Austin market, so you can move forward with confidence.

Does Every Inherited House Go Through Probate?

Before you start worrying about court dates, let’s figure out if you actually need full probate. Not every home transfer requires the long road.

If the property was held in a Living Trust, you generally skip probate entirely. The successor trustee can usually manage or sell the home immediately according to the trust documents. Similarly, if the owner filed a Transfer on Death Deed (TODD), the property transfers automatically to the beneficiary named on the deed.

If those don’t apply, there are still faster alternatives to full probate depending on the situation:

• Muniment of Title: This is unique to Texas. If there is a valid will and the estate has no unsecured debts (except for the mortgage), the court can admit the will purely to transfer the property title. It’s much faster than a full administration.
• Affidavit of Heirship: If there is no will and the estate is simple, this document is recorded in the county records to establish ownership. However, be careful here—some title companies are hesitant to insure a sale based solely on this affidavit until it has been on record for a few years.
• Small Estate Affidavit: This is used when there is no will and the value of the estate (excluding the homestead) is under $75,000.

Independent vs. Dependent Administration in Texas

If you do need to go through formal probate, the “type” of administration you get dictates how easy it will be to sell the house.

Independent Administration This is the gold standard in Texas. Most well-drafted wills specifically request this. In Independent Administration, the executor has the freedom to act without asking the judge for permission for every single task. You can list the property, accept an offer, and close the sale efficiently. It saves the estate a significant amount of time and legal fees.

Dependent Administration This is much more restrictive. In this scenario, the court oversees every move to protect creditors and beneficiaries. You must get court approval to list the home, and once you get an offer, you have to take it back to the court for confirmation. This process is slower, more expensive, and can scare off some buyers who don’t want to wait for a judge’s stamp of approval.

Step-by-Step: Selling a House in Probate in Austin

Once you know you’re moving forward with a sale, the process usually follows a specific chronological path.

1. File the Application Your attorney will file an application for probate. In our area, this usually happens at the Travis County Probate Court, though if the property is in the metro area, it might be Williamson or Hays County.
2. The Hearing and Letters Testamentary This is the most critical milestone. You (and your attorney) will attend a short hearing where the judge validates the will. Once approved, you receive Letters Testamentary. Think of this as your “badge of authority.” You cannot sign a listing agreement or a sales contract without these letters.
3. Notice to Creditors and Inventory You are required to publish a notice to creditors in a local newspaper and file an inventory of the estate’s assets with the court, usually within 90 days of your appointment.
4. Listing the Home This is where hiring a probate-experienced agent matters. The listing agreement and the eventual sales contract need specific addenda (seller disclosure requirements are different for estates). We also need to ensure the title company knows the file is in probate immediately so they can start their research.
5. The Sale If you have Independent Administration, the closing looks very similar to a standard house sale. If you are in Dependent Administration, we must submit the contract to the court. The judge will issue a decree confirming the sale, which we then take to the closing table.

• Timeline Note: Independent administration usually takes 3–6 months to settle, whereas Dependent administration can drag out for 6–12 months or longer.

Who Plays a Role in the Sale?

You are the decision-maker, but you need a team to keep the sale legal and profitable.

• The Executor/Administrator: Your job is to protect the value of the estate. You have a “fiduciary duty,” meaning you must act in the best interest of the beneficiaries, not yourself.
• Probate Attorney: In Texas, you essentially must have an attorney to file for probate. They handle the court filings and guide you on legal compliance.
• Real Estate Agent: You need an agent who understands things like “Seller is Estate of…” phrasing and knows how to explain the timeline to potential buyers so they don’t get spooked.
• Title Company: Not all title officers are experts in heirship issues. We always want to work with a title team that has dedicated officers for probate files.

Preparing the Property: Sell As-Is or Renovate?

One of the most common questions I get is, “Should we fix up the house or just sell it?” In the Austin market, the answer depends on the estate’s cash flow and your goals.

Option A: The As-Is Sale If the house hasn’t been updated in 30 years or has deferred maintenance, selling “as-is” is often the safest route. You will likely attract investors or flippers who can pay cash and close quickly. You won’t get the top retail price, but you avoid the stress of managing contractors. Note that while executors are exempt from some disclosures, you must still disclose known defects.

Option B: Minor Updates for Top Dollar If the “bones” are good, simple updates can yield a high return. Clearing out personal property, a fresh coat of neutral paint, and professional cleaning can make the home appealing to retail buyers. In Austin, buyers pay a premium for move-in-ready homes.

Option C: Keep as a Rental Austin has a robust rental market. However, think carefully before choosing this. Being a landlord is work, and keeping the estate “open” to manage a rental property can complicate things for the heirs who might just want their inheritance distributed.

• Warning: Never spend the estate’s money on renovations without ensuring all heirs are on the same page. If the market shifts and you don’t get that money back, it can lead to family disputes.

Costs, Fees, and Taxes for Austin Estates

Many heirs worry that the government is going to take a huge chunk of the inheritance. The reality is usually much better than they expect.

Estate Taxes Texas has no state inheritance tax. On the federal level, estate taxes only kick in for estates valued at over $13 million (as of current laws). For the vast majority of families, there is no “death tax” to pay.

Capital Gains and the “Step-Up in Basis” This is a huge financial benefit. If your parents bought the house in 1980 for $50,000 and it’s worth $600,000 today, you do not pay capital gains tax on that $550,000 growth. The tax basis “steps up” to the fair market value on the date of death. If you sell it shortly after for $600,000, your taxable profit is effectively zero.

Probate Costs While taxes might be low, there are fees.

• Attorney Fees: These vary by complexity but often range from $1,500 to $3,500 for straightforward cases.
• Court Fees: Filing fees in Travis County usually run between $300 and $500.
• Executor Fee: In Texas, executors can claim a commission (capped at 5% of monies received/paid out), though many family members waive this to preserve the estate value for everyone.

Holding Costs Don’t forget the monthly carry. You must keep paying property taxes, utilities, and insurance while the probate process churns.

Common Pitfalls to Avoid

Even with a good team, there are traps that can delay the sale or cost you money.

• Listing Too Early: You cannot sign a binding listing agreement until you have your Letters Testamentary. We can prepare the marketing, but we can’t go live until the judge says you are the boss.
• Insurance Gaps: Standard homeowner policies often contain a clause that voids coverage if the home is vacant for more than 30 days. You need to switch to a “vacant dwelling policy” immediately to ensure the asset is protected.
• Utility Mistakes: In the Texas heat (or occasional freeze), turning off the electricity to save $100 can cause thousands in mold or pipe-burst damage. Keep the climate control running.
• Family Conflicts: The biggest deal-killer isn’t the market; it’s the family. If one sibling wants to sell and the other wants to keep the house, it can freeze the process.

Probate Real Estate FAQs