What Should You Do If the House You Inherited Is in Foreclosure?

If you’ve inherited a house that’s already in foreclosure—or heading that way—you need to act quickly.

I’m Brad Woodall with Arborview Homebuyers and Probate Resource. We work specifically with inherited and probate properties, and this is a situation we see more often than you’d think.

I recently got a call from a real estate agent whose client was in the middle of the probate process when the inherited house was sold at a foreclosure auction. They wanted to know if that was even possible.

Before I go any further, I want to make one thing clear: I’m not a real estate attorney, and you should always consult one for legal advice. I’m simply sharing what I’ve seen from working with probate and inherited properties over the years.

Can a Foreclosure Sale Happen During Probate?

Unfortunately, yes.

In my experience, once the property has been sold at a foreclosure auction, there usually isn’t much you can do afterward.

When the original homeowner signed their mortgage documents, they gave the lender the legal authority to sell the property if the loan went into default. In Georgia, that’s commonly done through what’s known as a deed under power, which allows the lender to foreclose and sell the property at auction.

That’s why timing is everything.

Contact the Bank as Soon as Possible

As soon as you learn you’ve inherited the property, your first priority should be reaching out to the lender.

Sometimes that isn’t easy.

The bank may refuse to speak with you until certain probate paperwork is in place. In some situations, you may need temporary authority through the probate court before you can handle certain estate matters.

The important thing is to keep trying.

Don’t assume the bank knows the homeowner has passed away or that probate is underway. If nobody tells them, they’ll continue moving forward with the foreclosure process as usual.

Let the Lender Know You’re Going Through Probate

Once you’re able to communicate with the lender, explain:

• The property is currently in probate.
• You’re working through the legal process.
• How much longer you expect probate to take.
• What your plans are for the property.

Sometimes lenders will allow a little extra time when they understand what’s happening. That’s never guaranteed, but they certainly can’t work with you if they don’t know the situation.

Need to Sell an Inherited House in Georgia?

If you’re worried about foreclosure while probate is underway, don’t wait until the last minute.

Even if you aren’t ready to close yet, starting the conversation early can help you understand your options and prepare everything so you’re ready once the court issues the necessary documents.

Not sure where to start? Reach out to our team for a no-obligation conversation. We’ll take the time to understand your situation, explain your options, and help you determine the best path forward—whether that’s selling now, waiting until probate is complete, or simply pointing you in the right direction. Sometimes, getting started early can make all the difference. Fill out the form below and we will connect with you.

There’s a Difference Between Default and Foreclosure

Many people use those terms interchangeably, but they’re actually different stages.

When the mortgage payments are missed, the loan first goes into default.

The lender will typically send a notice explaining that the loan is behind and provide a reinstatement amount—the amount needed to bring the loan current, including missed payments, interest, and penalties.

If that amount isn’t paid, the lender may begin foreclosure proceedings.

Do What You Can to Keep the Loan From Falling Further Behind

Sometimes you may not be able to catch everything up immediately.

If you’re several months behind but can only afford to make a partial payment, making that payment may help slow the process and buy a little time.

The key is not to ignore the problem.

The longer the loan stays in default, the closer it gets to foreclosure.

Time Is on Your Side… But Don’t Count on It

Right now, many lenders are still working through foreclosure backlogs that built up after the COVID court shutdowns.

That may give you a little more breathing room.

But don’t mistake that for having plenty of time.

Time is absolutely critical.

Reach out to the bank early, keep them informed, and let them know your intentions. If you’re planning to sell the inherited house, tell them that.

The earlier everyone is communicating, the better your chances of avoiding unnecessary problems.

Can You Start Selling Before Probate Is Finished?

Sometimes, yes.

If you know you’ll likely receive your Letters of Administration or Letters Testamentary soon, you may be able to begin preparing the sale before probate is officially complete.

Some real estate agents are willing to list a property before those documents are issued, while others prefer to wait. Every brokerage has its own policies.

At Arbor View Home Buyers, we’ve done this many times.

We’ll often negotiate with the family, agree on a purchase price, and have the soon-to-be administrator sign a purchase agreement so everything is ready to go.

Technically, that agreement can’t be finalized until the probate court officially appoints the administrator or executor, but it allows everyone to get ahead of the process.

We’ve Closed Deals the Same Day Probate Was Finalized

We’ve had situations where the executor received their Letters of Administration that morning and signed the closing documents later that same day.

Once the probate court officially grants the legal authority to sell the property, the closing attorney can verify those documents and move forward with the closing.

By getting everything else prepared ahead of time, the sale can happen much faster.

We’ve done this countless times, and it can make a huge difference when foreclosure deadlines are approaching.

A Real Example From Our Experience

We recently had a probate case involving two inherited properties.

Unfortunately, the family was dealing with disagreements and delays throughout the probate process.

While everything was tied up, one of the properties ended up being sold at foreclosure auction.

That property is gone.

The second property is still moving through probate, but it’s a good reminder of why it’s so important to stay on top of the process and not let deadlines sneak up on you.

Final Thoughts

If you’ve inherited a house that’s in default or facing foreclosure, don’t assume everything will work itself out.

Contact the lender as soon as possible, keep them updated throughout probate, and start preparing for the sale early whenever possible.

The sooner you act, the more options you’ll usually have.

If you have questions about selling an inherited house in Georgia, reach out to our team at Arborview Homebuyers and Probate Resource. Give us a call or fill out the form on our website, and we’ll ask a few questions, learn about your situation, and help you figure out the best path forward. And while you’re there, be sure to explore our articles and videos—they’re packed with helpful information for families navigating probate and inherited real estate.