Your mother is legally responsible for paying the debts and administrative expenses of the estate. If there are sufficient funds available to do so, then partial distributions may be appropriate. It is usually a judgment call, and it generally makes sense to err on the side of caution and conservatism, since it is difficult to recover money from the beneficiaries, once it has been paid out.
I am generally in favor of distributing real estate to the beneficiaries as well, especially if the property is likely to be difficult to sell. There is no reason to keep the estate open, and incurring additional costs, in that kind of situation.
One of the most important things for you to understand is that your mother, as executrix, has taken an oath to act in a fiduciary capacity for your mother's estate. Long story short, if she were to distribute the assets before all creditors are paid, it is ultimately her that could be held personally liable. As my colleague about stated, erring on the side of caution is always the better course. I mention your mother's liability only to help you understand what might be going through her mind and/or her attorney's mind.
This is such a common scenario here in this down real estate market. Depending on the value of the bank account and all assets available to the estate for your mother to fulfill her responsibilities and duties as Executrix, she might be able to make a partial distribution from the Estate prior to its closure.
The answer to your last question as to whether the property can be distributed so the Estate canb e closed would be up to the Clerk overseeing the administration of the estate, and the answer could vary depending on the county. Presenting to the Clerk the folliwing, the Clerk might be persuaded to allow distribution of the property to the beneficiaries through an Executor's deed: 1. The beneficiaries are in agreement and wish to receive the real estate; 2. The intent of the testator was to simplify their lives through the sale and was not to preven them from owning the real estate; and 3. That not selling the property does not hurt the payment of any claims of creditors or other responsibilities of the Estate. If the Clerk agrees, then yes, the property can legally be distribtued to the beneficiaries and the estate can be closed.