Selling A Home In Probate

Riverside ,San Bernardino and Orange County Probate Court –
All about selling property in Probate
A home is sold in probate court when someone dies intestate or without bequeathing their property. When that happens, the state of California takes over and administers the property’s sale.
Prior to the sale of real property, including real estate, an Executor or Administrator must be appointed. Typically an Executor is named in the decedent’s will. If there is no will, or the named Executor is unable or unwilling to serve in that capacity, the court will appoint an Administrator. In either case the named individual will be responsible for the sale of estate property.
The Executor or Administrator has two options concerning the sale of the assets in a probate proceeding. The increasingly popular path is under the Independent Administrator of Estates Act (IAEA) by which no court confirmation is required. This is referred to as “Full Authority”. The Executor/Administrator receives this power by filling out an application. Typically, if he/she wants the right to sell real estate without court confirmation it is granted by the court.
The Executor or Administrator may also seek court confirmation, also known as “Limited Authority”. This option comes with certain requirements. First, the accepted offer on real property must be at least 90% of the value established by the Probate Referee. Once an offer is accepted a court hearing is scheduled by the attorney for the Executor.
Probate Real Estate Properties are typically either sold as:
Court Confirmation Not Needed” or  “ Needs Court Confirmation”
1) When court confirmation is NOT needed:
Under the IAEA the Executor, or Administrator, does have full authority which confers the right to sell real estate property without court approval. This sale progresses much like a “standard sale” in California Real Estate, with slight changes in disclosures the sellers must provide. A Riverside County Probate Realtor should provide you with all the necessary documentation.
2) When Court Confirmation is Needed:
The Executor or Administrator has “Limited Authority”. This option comes with certain requirements. First, the accepted offer on real property must be at least 90% of the value established by the Probate Referee. Once an offer is accepted a court hearing is scheduled by the attorney for the Executor. Probate laws are relatively straight forward in California, but before hiring a real estate agent you should be sure that your Realtor is sufficiently knowledgeable about the ins and outs of probate sales.

Marketing a probate sale

In a probate sale, the property is marketed just like any other property. The probate attorney or the estate representative will hire a Probate real estate agent, sign a listing agreement, and show the property, just as they would a traditional listing. Generally, the list price is based upon the listing agent’s suggestions as well as an independent appraisal ordered and issued by the court.

Making an offer

An interested buyer may make an offer on the property at any time. However, in the case of a probate sale, the offer must be accompanied by a 10 percent deposit. The estate representative will then accept or counter the offer, just like any other sale.

The offer is subject to the court’s confirmation. Even though the seller may have accepted a buyer’s offer, the seller is not committed to that buyer or their offer. The estate representative, through their probate attorney, will then petition the court to confirm the sale. A future date is chosen for the sale to be confirmed in the court. Once the sale date is determined, the parties now must wait a minimum of 30 to 45 days. During this time, the court requires that the property be properly advertised and marketed with the new accepted price. In California, the court will take that accepted offer and raise it by 5 percent plus $500. The total becomes the new probate price to be marketed.

Going to Court

In order for the sale to be confirmed, the court requires that the new buyer, plus any other interested party, come to probate court to confirm the sale. The property is then sold auction style with the opening bid being (in the case of California) the accepted offer price plus the 5 percent, $500 increase.

Sometimes multiple buyers show up to bid on the property in increments of $5K. If nobody shows up to bid on the home, the first buyer gets the property for their original offer price. If the property is sold to one of the bidders, they must immediately hand over a deposit of 10 percent.

The deposit may not be refundable. There are some things for buyers to be aware of when moving forward on a probate sale. Many times, the 10 percent deposit that’s required with the offer is not refundable unless the original buyer isn’t the final court confirmed buyer.

Also, since the seller is deceased, there usually isn’t anyone to disclose a previously leaky window, illegal work done on the property, plans for a major change to the neighborhood, or anything else that may negatively affect the property’s value. That’s why hiring a Probate Realtor can help you avoid the many pitfalls that may occur during this process.

Any serious buyer should have the property inspected from top to bottom before writing an offer.

Trust Sale Property

Trust Sale Real Estate in Southern California is held in a revocable or non-revocable trust. For the purposes of Property in California, the Trustee or Executor of the Trust is The Seller of the property. The Same Exemptions apply as those in a Probate Sale Except if the seller is a nature person, is the sole trustee of a revocable trust and he/she was either former owner or occupant of the property.