Selling a Parent's or Grandparent's Home in Knoxville? Get Your Ducks in a Row BEFORE You List!

A real-life reminder that selling a family property isn't always as simple as putting a sign in the yard.

I currently have a property under contract in the Knoxville area that has reminded me just how important it is to get your paperwork, finances, and legal ducks in a row BEFORE putting a home on the market.

And I am telling you, this one has had some unexpected twists!

Let me explain.

It Started With a Granddaughter Trying to Help Her Grandmother

A granddaughter who lives in New York found herself responsible for helping sell her grandmother's property here in East Tennessee.

Here's the thing. She didn't even know about this property until last year!

Her grandmother was ill, and the granddaughter's name was also on the deed. She had a power of attorney and was doing her best to handle everything from another state.

We listed the home, found a buyer, and got it under contract.

Sounds pretty straightforward, right?

Not exactly.

Surprise! There's a Mortgage AND Unpaid HOA Dues

As we started working through the transaction, we discovered there was an existing mortgage and unpaid homeowners association dues.

Now, these are things that absolutely matter when you're selling a home.

Why?

Because the sales price is NOT the amount you're walking away with at closing.

Any outstanding mortgage balance, HOA dues, applicable liens, closing expenses, and other obligations can affect the seller's net proceeds.

And when you're handling a property for an elderly family member or settling an estate, those numbers can come as quite a surprise.

In this particular situation, the granddaughter was now trying to track down mortgage information and figure out exactly what was owed.

All while living hundreds of miles away.

Then Something Happened That Changed Everything

Unfortunately, while we were under contract, her grandmother passed away.

First and foremost, this was a family dealing with the loss of someone they loved.

But from a real estate standpoint, we now had another situation to work through.

Remember that power of attorney I mentioned?

The title company determined that it wasn't acceptable for the sale because of technical issues with the document, including a missing notary seal.

And here's something many people don't realize.

Having power of attorney does not automatically mean you have the legal authority to sell someone's property after they pass away.

Generally, a power of attorney ends when the person granting it dies, although Tennessee law has limited protections for certain actions taken in good faith without knowledge of the death.

And just because two people are listed on a deed doesn't necessarily mean the surviving owner automatically inherits the entire property.

It depends on how the deed was written.

In our situation, the property was not titled with a right of survivorship.

To make things more complicated, Grandma didn't have a will.

Now we had to establish who had the legal authority to transfer the property before we could close.

What Happens When Someone Dies Without a Will in Tennessee?

When someone passes away without a will, Tennessee's inheritance laws help determine who inherits their property.

Depending on how the home is titled, the family circumstances, and the requirements of the title company, additional documentation or probate proceedings may be necessary.

For this particular sale, the title company identified several documents needed to move forward:

• Death certificate: To document the property owner's passing.
• TennCare release: To address applicable TennCare estate recovery requirements.
• Affidavit of heirship: To document family history and identify the legal heirs. In this transaction, the title company requested that a disinterested third party familiar with the family sign it.
• Estate affidavit and waiver: Additional documentation required by the title company.
• Mortgage payoff information: To establish the amount owed and determine what must be paid at closing.

Not every inherited-property sale will require these exact documents. Some situations may require additional legal steps.

And yes, we're working through all of this while the property is under contract!

Before You List a Family Home, Here's What I Want You to Know

Whether you're selling your parents' home because they're moving into assisted living, handling an inherited property, or helping an elderly family member, please do yourself a favor.

Get your ducks in a row before you put that house on the market.

Here are a few things I recommend checking first.

1. Find Out Exactly Who Owns the Property

Don't assume that because your name is on the deed, you have the authority to sell the entire property.

Have the deed reviewed.

How the property is titled makes a BIG difference, especially if one of the owners has passed away.

2. Know What Is Owed on the Home

Is there a mortgage? A home equity loan? A reverse mortgage?

Find out who the lender is and approximately how much is owed.

You would be surprised how often family members don't know the financial details of a property they're suddenly responsible for selling.

3. Check for Unpaid HOA Dues, Taxes, and Other Liens

These expenses can add up and affect your bottom line.

The last thing you want is to expect a certain amount of money from the sale, only to discover outstanding balances that need to be paid.

4. Make Sure Your Power of Attorney Is Acceptable

Just because you have a signed power of attorney doesn't mean it will be accepted for a real estate closing.

Have a qualified Tennessee attorney and the title company review it early, particularly if the owner is ill or unable to attend closing.

A missing signature, notary issue, or lack of proper authority can create serious problems.

5. Find Out Whether There's a Will or Trust

If you're helping an elderly parent or grandparent, find out whether they have estate planning documents and where they're located.

If someone has already passed away, don't assume you can immediately sell their property.

Depending on the circumstances, additional documentation or probate may be necessary.

6. Get an Estimated Seller Net Sheet

This is a big one!

Before you start counting on the money from a sale, have your Realtor prepare an estimated net sheet.

We want to account for the mortgage payoff, known outstanding expenses, closing costs, and other anticipated deductions.

The goal is to understand what you may actually walk away with, not just what the home might sell for.

Selling a Family Home Is Sometimes About Much More Than Real Estate

Here's what I keep thinking about with this particular transaction.

This granddaughter lives in New York.

She didn't know about the property until last year.

She was trying to help her sick grandmother.

Then she discovered financial obligations she needed to sort through.

And before the sale could close, she lost her grandmother.

That's a LOT for one person to handle.

And it's exactly why I believe these situations require more than someone who can put a home in the MLS.

You need someone who understands the real estate side, knows what questions to ask, works closely with the title company and other professionals, and helps you figure out what comes next.

I can't make every complication disappear. Believe me, I wish I could!

But I can help identify potential problems early, coordinate the real estate side of the transaction, and work with the right people to keep things moving.

My Advice? Have the Conversation BEFORE You List.

If you're in Knoxville, Farragut, Maryville, Oak Ridge, Lenoir City, or anywhere around East Tennessee and you're responsible for selling a parent's, grandparent's, or inherited home, don't wait until you have a buyer to start figuring everything out.

You don't need to have every answer before calling me.

That's what the first conversation is for.

We'll talk about the property, what you know, what you don't know, and what needs to happen before putting it on the market.

Because finding a buyer is only part of selling a house. Making sure you can actually get to the closing table is just as important.

Angie Cody | LPT Realty
Knoxville, Tennessee
My Expertise. Your Profit.

Have a family property you need to sell? Call me. Let's talk about where to start.

Note: Every estate and property ownership situation is different. This article is for general information, not legal advice. A Tennessee attorney and title professional should determine the legal requirements for your specific sale.