California Probate Real Estate Explained in 3 Easy Stages

California’s probate real estate laws can be difficult to learn on your own. Breaking the sale of probate real estate down into three stages can help people understand what to expect during this often difficult and stressful time for families. The important thing to remember is that any qualified probate real estate agent, estate planning attorney, or trust attorney should be able to answer any questions that you still may have after reading up on your own.

 

Stage One: Determining the Executor of the Will

 

The first stage of the probate process is determining the Personal Representative, or PR. This is the person the Will names as having the power necessary to make legal decisions, including the sale of property, on behalf of the decedent’s estate. Typically this stage is very short. A Will normally names the PR itself. Common choices are the trust attorney or estate planning attorney who drew up the Will, or one of the decedent’s close relatives.

 

In the event that an PR was not named in the Will (or in cases where a Will is not present, or the named PR is unable or unwilling to serve), Alameda County will name an estate planning attorney or qualified court official to be the Administrator. This ensures a fair division of profits from the sale amongst the heirs and grants official legal authority to sell properties. Until either an Administrator or PR has been officially named and confirmed, there is no way to sell a probate house.
Stage Two: the Usual Selling Process

 

One the PR has been confirmed, the process of actually selling the probate real estate can begin. The property has to be appraised, and then listed for sale for not less than 90% of its appraised value. Often, probate houses are priced to sell. The money is needed to cover existing debts, pay legal fees, fulfill the gifts mentioned in the Will, or otherwise is preferable to the heirs than the property itself.

 

The next part of the usual selling process is typical to selling real estate everywhere. It’s common to bring in a specially trained probate real estate agent, so that everyone involved with the sale knows the details of the probate process, but it’s not a requirement. A dedicated individual could sell a probate house without prior knowledge of the probate process if they’re willing to learn. The house is shown, often placed online in various real estate sites, and people are able to make offers.

 

When a potentially acceptable offer is placed on the house and the terms of the sale are negotiated (probate real estate is typically sold “as is”, with no promises to repair anything in the house or screen for other testing), every heir is notified of the sale via a letter. They then have 15 days to respond if they want to object to the selling price. If no one objects the sale is made. The house goes into escrow and the sale becomes final.
Stage Three: Probate Overbidding and Final Sales

 

There is a third possible stage. If any of the heirs want more money for the house they can formally object. That begins the overbid process. This means that a court date is set and the house will be auctioned off. The court date will be mentioned in a local paper and all interested parties can report to the court house to attempt to outbid the other. This leads to the highest possible sale of the property. Each new bid must be at least $500 greater than the last, and the buyer will have to present a cashier’s check (not a personal check!) for a deposit equaling 10% of the first $10,000 + 5% of the remaining offer on the house. When this deposit is confirmed the sales contract can be negotiated and the probate process can be drawn to a close.

 

http://estate.findlaw.com/estate-administration/will-executor-duties-faq.html

http://www.car.org/legal/probate-folder/probate-sales-real-property/?view=Print&url=http

http://homeguides.sfgate.com/sell-real-estate-during-probate-3122.html