Real estate is local. The probate process in Los Angeles may vary from Santa Clara County.
Work with a local real estate agent who knows the real estate markets when buying probate properties.
Probate Process on Submitting Offers
What is the proper way to submit an offer on probate properties for sale?
- All offers must be in writing. Best real estate practice is to use a California Association of Realtors standard probate form. Other purchase contracts, not tailored for probate sales may get used. In either case, the contract must include:
- The title must get conveyed however the estate holds the title
- The sale is subject to court confirmation
- Property gets sold “as is”, if applicable
- Total commission paid will get approved by the court and paid from the proceeds of the sale
Who are the offers submitted to in a probate sale?
Offers get submitted to the local real estate agent that represents the personal representative.
Although very rare, a representative may require offers go to their probate attorneys to review.
The most common method of submitting offers is to the listing agent who will then present the offers.
Who accepts and rejects offers submitted on probate properties?
- The personal representative may accept, counter or reject offers.
- All accepted offers are subject to court confirmation unless the sale is under the IAEA and the personal representative has full authority to act and administer the sale.
When is the best time to submit offers on probate real estate sales?
- Offers get submitted any time.
- Some real estate agents set an offer deadline.
- All offers received by the real estate agents before the sale closes must get presented to the personal representative.
- Exceptions to this would be if the personal representative instructs the real estate agent not to present offers received after an offer gets accepted.
- The best course of action is to present all offers.
Do contingent offers require court confirmation?
- Personal representatives acting with full authority under IAEA do not have specific rules that prohibit accepting a contingent offer.
- California Probate Code § 10315 specifies that acceptance of a credit offer is subject to court approval.
- The court may approve seller (estate) financing.
- A personal representative may accept an offer with a contingency provided the contingency gets removed before the court date.
Is there a minimum price probate properties get sold?
- Under IAEA without full authority, in a private sale, the minimum offer price must be at least 90 percent of the appraised value of the property. The appraised value gets made within one year of the court date confirming the sale.
- The appraised value gets set by the probate referee.
Is a minimum deposit required?
- Under IAEA with full authority, there is not a minimum deposit required.
- In Santa Clara County, people who buy probate properties, including an experienced investor, expect to deposit 3% of the purchase price.
- Otherwise, all sales are subject to local rules of court and a court hearing to confirm the sale. Many probate courts require a ten percent deposit in the form of a certified check, cash or cashier’s check at the at the hearing to confirm the sale.
When is the accepted offer filed?
- A Personal representative petitions the court to confirm the sale within 30 days after the offer to sell real estate gets accepted.
- If the representative does not petition the court within 30 days, then the buyer may petition the court for confirmation of the sale.
- Buyers should consult with a probate attorney if they feel it may be necessary to petition the court for confirmation of the sale.
- An exception is if the personal representative is acting with full authority under IAEA.
- When the representative is acting under IAEA, the court requires a notice of proposed action be sent to beneficiaries, heirs, and anyone that has requested special notice.
Can an original offer get overbid at the court hearing to confirm the sale?
- Under IAEA with full authority, no.
- If court confirmation is necessary, then another buyer may show up at the court hearing and bid on the property with a higher offer.
What is the minimum overbid required?
The following formula applies to the overbid process:
- The overbid must be the amount of the original bid … plus
- A minimum of 10 percent of the first $10,000 of the original bid … plus
- A minimum of 5 percent of the amount of the original bid over $10,000.
For example, the original bid is for $100,000.00. The initial overbid will need to be at least $105,500.00. For example:
- 10 percent of the first $10,000 = $1,000.00
- 5 percent of the remaining balance of $90,000 = $4,500
- $1,000 + $4,500 = $5,500 which gets added to the original bid of $100,000
- The minimum overbid would need to be $105,500.
After the first overbid, the minimum amount of increase gets set by the court at the court hearing. The court continues to accept bids similar to an auction until the highest bid wins!
Visit the frequently asked questions for more information on California probate and the probate process to sell real estate.
Probate auctions or public auctions to sell real estate follow their own process.
Auctions are published online or in a local newspaper.
The publication shows where auctions are held.
Homes sold at auction have their own bidding process.
The best way to avoid the probate process to sell real estate is to hire a probate attorney to create an estate plan designed to meet your specific needs.