Estate sale (selling a deceased person’s home)상속 매물 (유산 매각)

What is it?

An estate sale is the sale of a home after its owner has died, made by the estate trustee (the person in charge of the deceased person’s estate, formerly called the executor). When a listing says “estate sale”, the seller is the estate, not a living owner.

Three things are different from an ordinary sale. First, the seller often needs the court to confirm their authority to sell (probate). Second, the estate trustee did not live in the home and knows little about its condition, so “as is” terms are common. Third, it takes longer.

In the United States “estate sale” can mean a sale of the contents of a house. In Ontario real estate it means the sale of the home itself.

Who can sell?

Ontario’s guidance says the estate trustee is the only person with the legal authority to manage or distribute an estate. The person named in the will is usually the estate trustee; if there is no will, the spouse or a close relative applies to the court.

The estate trustee normally needs a Certificate of Appointment of Estate Trustee from the Ontario Superior Court of Justice. This process is called probate. The government’s guidance says that if the deceased’s real property must be sold, the certificate (or a Small Estate Certificate) should be obtained before anyone signs an Agreement of Purchase and Sale. If the estate is worth up to $150,000, a Small Estate Certificate can be applied for instead.

There is an exception. If the home was held in joint tenancy (with a right of survivorship), it passes automatically to the surviving owner, so no probate is needed for the home. The survivor applies to delete the name with proof of death and then sells like any other owner.

Step by step

1. Find the will and confirm who the estate trustee is. Hire an estates lawyer.
2. Apply to the court for the Certificate of Appointment (application Form 74A and supporting forms). The Estate Administration Tax is paid as a deposit with the application. The guidance says applications are typically processed within 15 business days, but longer if documents are missing or a judge must decide something.
3. Once the certificate is issued, the lawyer registers a transmission application that puts the estate trustee on title. Only then can ownership be transferred.
4. List and sell the home. The seller in the agreement is written as “the Estate of [name], by its estate trustee [name]”.
5. After closing, the sale money goes into the estate account to pay debts and taxes before it is divided among the beneficiaries.
6. Within 180 days of receiving the certificate, file an Estate Information Return with the Ontario Ministry of Finance, even if the estate value is $0.

How much is the Estate Administration Tax?

The Estate Administration Tax (often called “probate fees”) is paid by the estate to the Ontario government when the certificate is issued. The estate value includes real estate in Ontario at its appraised value on the date of death, minus encumbrances such as a mortgage or lien. Funeral costs, legal fees, real estate commissions and credit card debts cannot be deducted.

Government example: for an estate valued at $240,000, ($240,000 − $50,000) ÷ $1,000 × $15 = $2,850. The value is rounded up to the nearest $1,000. If no certificate is applied for or issued, no tax is owed.

What is different in the contract?

• The seller is the estate, not an owner. If there is more than one estate trustee, all of them normally sign.
• If the certificate has not been issued yet, it is common to make the deal conditional on getting it, or to set a closing date well after it is expected. The government recommends getting the certificate before signing.
• “As is, where is” terms are common. The estate trustee never lived in the home and cannot warrant its condition, and there is often no seller property information statement (SPIS).
• The contents of the home (chattels) may need their own clause, listing what the family will remove and what stays.
• Some agreements allow the closing to be delayed for estate reasons (beneficiary consents, court steps).
• Check the exact wording with your lawyer. The points above describe common practice, not a fixed form.

What buyers should watch out for

• Get a home inspection. Under “as is” terms it is hard to claim for a hidden (latent) defect later.
• Your lawyer checks that the estate trustee has the certificate and is registered on title. A deal signed before the certificate can be delayed on closing.
• The price may be below market because the home sat empty or needs work, but you have to price the repairs yourself.
• Several trustees or a dispute among beneficiaries can slow things down. Leave room in the closing date.
• If the deceased owner’s spouse was living in the home without being on title, section 26 of the Family Law Act lets them stay rent-free for 60 days after the death. Confirm whether the home is vacant.

What the estate trustee (seller) should watch out for

• Get the Certificate of Appointment before signing a purchase agreement. The government recommends it, and the buyer’s lawyer will ask for it.
• Get an appraisal as of the date of death. You need it for the Estate Administration Tax and for income tax. The guidance says to use the date-of-death appraised value even if the home sells for more or less shortly after.
• Keep the insurance, heat and water on. A vacant home can change your insurance terms, so tell the insurer.
• The deceased person’s income tax (the deemed disposition at death, the principal residence exemption and so on) is a matter for an accountant. This page covers only the Estate Administration Tax.
• File the Estate Information Return within 180 days of the certificate and keep the records for four years.

Does joint tenancy avoid probate?

If the home was held in joint tenancy, the right of survivorship passes it automatically to the surviving owner. Ontario’s guidance lists “real property which does not pass to another person by right of survivorship” as a reason to apply for probate, and excludes “assets where there is joint ownership that automatically become assets of the other owner(s)” from the estate value for the tax.

There is an exception. Under section 26(1) of the Family Law Act, if a spouse dies holding a matrimonial home in joint tenancy with someone other than their spouse, the joint tenancy is treated as severed just before death, so the share goes into the estate. A home in one name only, or a tenancy-in-common share, is part of the estate, and selling it normally requires probate.

Example