Selling a house under California probate is much different than selling a house in a private sale. Understanding the process can make it easier to navigate. There are specific parameters that must be followed in some cases, which are based on California Probate Code 10300, et seq.
Selling requirements for a probate sale
In adherence to California Probate Code 10309, if a property is involved in a probate sale, it must be sold for at least 90 percent of the appraised value within one year before the sale. A court hearing date will be set when an offer is received that is at least 90 percent of the appraised value and satisfies the executors.
How long does a probate sale take to complete?
The process for a probate sale begins by getting a court date. It can take as long as 2 to 8 weeks for a confirmation hearing to be set. During the time you’re waiting for a date, contingencies, such as the appraisal, property inspections and other vital information, must be satisfied by the original buyer.
Understanding the overbid process
During the confirmation hearing, the original buyer’s offer is submitted for approval. However, before a judge can approve it, they will see if anyone else wants to bid on the property, which is known as the overbid process. If someone wants to bid, it must be 5 percent above the original buyer’s offer. Other bids can also be made until a final price is determined. This process deters many buyers.
Confirming the probate sale
A judge will confirm the sale, and no other contingencies are allowed. A payment of 10 percent is usually given to the attorney for the administrator in the form of a cashier’s check.
Knowing how the process works for a probate sale can make you more informed. If you find yourself dealing with one, you’ll know what to expect.
Avoiding the Probate Code 10300 requirements
In most cases, an experienced probate attorney can help you obtain full powers under the Independent Administration of Estates Act (IAEA). There are still requirements for an IAEA probate sale, but they are much easier to satisfy. Mainly, the administrator is required to give notice to the heirs of the terms of the sale of the real property.
Choosing the right realtor
Choosing the right agent to sell the estate property is perhaps the most crucial part of the probate real property sale process. Many realtors are unaware of the probate rules, and they do not know how to conduct a probate sale, which is very different from a personal sale of real property, even when the administrator has IAEA powers.
A realtor with little or no probate sale experience may inadvertently cause the administrator to breach her or his fiduciary duty. For example, an uninformed realtor may not know that a listing agreement under the Probate Code can last no longer than 90 days. An uninformed realtor may also list the administrator as the seller in her or his personal capacity, rather than making it clear that the administrator is selling the house under court authority.
Having an experienced probate attorney working with an adequately experienced realtor is crucial for making sure the sale of estate real property is conducted within the strict requirements of the Probate Code.