When Can Property Be Sold Through Probate
In the event of a property needing to be sold. A court order may be needed so that the best interests of all beneficiary parties are met. If the will does not mention any order for the property to be sold no valid will exists, then the executor will have the choice to sell the property or not.
Generally, it is most common for property to be sold by the executor to pay debts, taxes, and other expenses needed for the administration of a decedent’s estate. The executor or personal representative must be first be granted the authority to act on these decisions. This authority is given by the court when Letters Testamentary or Letters of Administration are submitted on request.
These letters specifically name the personal representative and convey whether they have full or limited authority that is granted under the Independent Administration of Estates Act. The executor would be required to obtain a court appraisal before any sales take place. The executor will then need to file a petition with the court for the sale of the property. They will also have to state the probate price for the real property. A confirmation hearing will be held following this and the property can now be formally listed for potential buyers.
How Is Probate Property Sold in California?
Most properties in California are sold in the following traditional methods which don’t take a lengthy process:
- Real Estate Agency: The most common method to sell a property is through a real estate agent. The estate representative in most cases has to choose the real estate agent or probate broker. A probate attorney can recommend a real estate agency to a personal representative. However, the personal representative is not obligated to do anything and can choose to use the services of a different agency.
- Private Sale: Private sales are usually found in newspapers and are administrated by attorneys. Confidential bids are placed with the attorney at a specific time and date. The attorney will then evaluate all bids and grant the highest bidder the sale.
- Public Auction: Public auctions are generally announced in legal newspapers. They are also hosted at a specific date and time. Bids are verbally announced and the highest bidder is granted the sale.
- Private Auction: These auctions are hosted by auction companies. The auction company notifies potential buyers of what properties will be available for the bidding process. Once again, the individual with the highest bidder is awarded the sale.
- Trust Department: The Trust Department can act as a personal representative and have the probate property sold.
What Price Can a Probate Property Be Sold For?
The California court requests a confirmation when it comes to the sale of probate property. The sale price for the property must be at least 90% of the property’s market price, within a year of the sale. This ruling is by the California Probate Code 10309. The terms of the sale will need to be evaluated and approved by the California court.
If an offer of 90% of the estimated value is placed on the probate property, and the personal representative is content with the amount, a court hearing will be set to approve the sale.
Probate real estate sales by the personal representative with full authorization under the IAEA are not subject to these restrictions. Sales with full authorization under the IAEA may have the same restrictions as with non-probate sales.
Depending on the county courthouse the personal representative chooses to process the sale from, the process can last from two to eight weeks to get a date for the hearing. During this time, the original buyer is responsible for handling all responsibilities for the court to confirm the sale. The buyer would need to oversee property inspections, appraisals, etc. These contingencies are crucial to have the court approve the sale.
Will You Need a Notice of Sale Before Probate Property Is Sold?
A Notice of Sale is generally published before a property is sold in California unless:
- The decedent’s will instructs the personal representative to sell the property.
- The decedent’s will gives full authority to the personal representative to sell the property.
- The personal representative of the estate has full authorization under the IAEA
If the decedent did not leave a will and the personal representative is not authorized by the IAEA, then a notice of sale will be released before the sale of the property. The Notice of Sale contains information regarding the property and the sale to the public. It is generally released to real estate buyers in a legal newspaper within the property’s residing county.
The newspaper will be required to publish the sale at least once a week, at least three times over ten days before the sale takes place. The final release will have to be at least 5 days after the first release. The sale of a property sold under the IAEA can proceed without the need for a notice.
How the Process Works
The real estate agent who will sell the house first has to review recent sales and trends in the marketplace to establish a list price. Real estate specialists need to the property’s local real estate market and sale history. By factoring in the property’s location and condition a recommended price listing can be determined.
The services of a probate referee are used to establish an appraisal value for both the real and personal property. Once the property is marketed, the real estate agent will provide buyers and their agents with policies and information regarding probate. The agent will include the property among their probate listing to gain the most exposure to potential buyers.
Serious buyers will be notified of court dates and hearings. Generally, the legal process to buy or sell a probate property will take no longer than a traditional sales transaction would. Real estate markets do vary throughout the state of California.
It is common for homebuyers in Santa Clara County to provide a lender approval letter if they are paying for the property and need to provide proof of funds. This proof is needed when buyers want to pay for the property for sale through means of “all cash”.
The current property owner will be required to keep insurance up to date until the property is sold. Not all personal representatives choose to sell, some end up keeping the property for rental or for investment purposes. Probate property sales provide ample opportunities for investors looking for investment property.
Probate Disclosure Laws in California
All homes, including ones that are mobile, must adhere to agency disclosure law if the real property will be the subject of a sale, trade, contract, or lease which lasts longer than a year. This ruling also applies to the property sold through probate.
A Transfer Disclosure Statement (TDS) is an essential document for disclosure in the state of California. The personal representative is exempt from the ruling to present a TDS to home buyers. This exemption does not prevent the personal representative from disclosing all information about the property’s value and market appeal.
Personal Representatives are required to disclose any information they have about the property by using an Exempt Seller Disclosure form. California probate exemptions can be some of the most confusing policies in the state’s probate sales. The TDS exemption is applicable if there was no awareness about the property being sold through probate. Excluding exemptions, probate sales in California must adhere to all disclosure laws of the state.
The Duties of The Personal Representative
When a personal representative is appointed by the court, they are responsible for managing the decedent’s estate and many other duties and obligations from the court. The personal representative is required to manage and administrate the decedent’s assets and property with extreme care.
To sell the probate property, the representative will need to hire a highly skilled and experienced real estate agent and make sure the sale of the property is optimal. The hired probate real estate agent/s will need to be evaluated for their knowledge, experience, and training regarding property sold through probate.
It is both required and crucial for the personal representative to hire a probate real estate agent that is capable and trained to sell a property through probate.
The Help You Need
Making use of a legal document can be a great benefit for you if you have been appointed as a personal representative by the court. They are able to prepare the documents relevant to your legal matter and guide you through the process. It is an inexpensive method of finding help with legal matters that don’t come close to the fees you would have to pay a probate attorney.
Consider A People’s Choice. We strive to provide our clients with the best service and ensure that we are beneficial to your probate needs. Don’t hesitate, contact us today!