The will further states property shall be sold and offspring are to
split the proceeds. However, the will does not specifically designate
who inherits the property/deed.
This is an instruction regarding who inherits the property. It means that the executor of the probate estate (in an official capacity), who takes title by operation of law upon appointment, is directed to sell the property rather than to distributed it in kind.
Will there be legal or financial problems with a foreign executor?
Not necessarily. Generally, the main issue is that a foreign executor must sign a document expressly submitting to the jurisdiction of the probate court when appointed in addition to other documents that are signed by all executors.
Pre-death, in the will, would it be better to designate the American
resident offspring as executor?
Not necessarily. Hands on administration of the estate and dealing face to face with a local probate lawyer is easier for a resident of the state where the assets are located and the decedent resides, but in these days of telecommunications this isn't a decisive factor. The relative competencies of the prospective executors is more important.
If both offspring agreed, can the overseas offspring easily transfer
executorship to the American offspring, or will there be legal or
Assuming that they are the only interested parties in the estate, they can do so. You can't be compelled to serve as an executor just because you are nominated by a will to do so. If one person declines to serve, the person with next highest priority which would likely be the other sibling, may apply to the probate court to be appointed. The main financial consequence is that typically, whoever does the job is entitled to reasonable compensation from the estate for their services.
Would there be legal or financial deed ownership issues, since neither
offspring specifically inherited the property?
Could a court order the property to be auctioned out from under the
If all interested parties agree, they can defy the will. The normal process, however, is for the executor to follow the will and to sell the property in a commercially reasonable manner, typically by engaging a real estate agent to handle the sale. If the executor fails to take action, and an interested party objects, it would be more common for a probate court to remove the executor and appoint another one, than to order a sale at auction, which would typically be a course of last resort.
This said, under appropriate circumstances, the court of probate jurisdiction would have authority to order an auction of the house. Most commonly, a court order to sell a decedent's house at auction would arise when the decedent (i.e. the dead guy) only owned an undivided partial interest in the house (called a tenancy in common interest) and the non-deceased third party co-owner of the house (perhaps a brother or ex-wife of the decedent) declined to cooperate in selling it.
If a court determines the overseas executor offspring receives the
property deed, the overseas executor wants to remain executor but give
deed to American offspring for easier selling of the property, would
the property have to go through titling and closing costs for the
transfer, and then again for property sale to a third party?
This question reflects a fundamental misunderstanding about how probate works. Title to the property vests in the estate by operation of law upon the death of the decedent. The executor has authority, once appointed, to take actions such as signing a deed to a third-party buyer, on behalf of the estate. There is no intermediate closing and transfer of title to vest title to the property of the decedent in the name of the estate before it goes from the estate to the third party. The net proceeds of the sale to the third party (after costs of sale and prorations of things like property taxes and prepaid insurance) are then placed in a bank account for the estate and paid to the heirs after expenses of administration are paid.
There is nothing that makes it significantly harder for an overseas executor to close than a domestic one. The title company handling the sale emails the deed (and any other paperwork that needs to be signed) to the executor. The executor prints the documents to be signed, signs the non-notarized documents, and signs the deed in the presence of his friendly neighborhood notary in the foreign country where the executor lives, who notarizes the deed. The executed deed, together with a document called an apostille proving that the notary is really a notary, is sent back to the title company (probably with a scanned copy by email and a hard paper copy following by express delivery). Coordinating time zones may be a pain depending on the location of the particular foreign country in question (but the closing does not have to happen for all parties at exact the same time), and if the overseas executor is someplace primitive and remote with no internet access or computers or printers or faxes and no notaries, that could be a problem. But there are increasingly few places like that in the world.