Source: https://talktoglenn.com/oldsite/probates/buying-a-probate-propery/
Timestamp: 2019-04-25 23:49:46+00:00

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Buying a property going through the probate process has specific laws that makes the process different. It is important you the buyer knows some of the potential differences. The information below is not intended to be legal advice and is not complete to all of the ins and outs in a probate transaction. The information is to give you a basic understanding. I urge you to discuss your questions with your agent and or an attorney to completely understand the probate process.
Probate with the Executor/Administrator has LIMITED AUTHORITY which requires court confirmation of the real estate transaction.
Probate with a PUBLIC ADMINISTRATOR. This process requires real estate transactions to have court confirmation. The Administrator is a public employee appointed by the court in the absence of a family member or other related person acting as the administrator.
Are there any restrictions on the sales price of estate real property?
What is meant by court confirmation of the sale of real property?
1. Can you give me a general description of how a sale of real property in probate works?
An administrator (administratrix) who is appointed by the court when there is no will, when the will does not name an executor or when the named executor is unable or unwilling to serve.The personal representative is charged with the fiduciary responsibility of gathering the assets and paying the debts of the decedent in such a way that the beneficiaries or heirs of the decedent receive the maximum inheritance. The personal representative usually will hire an estate attorney to handle the legal aspects of the probate. Most business dealings are through the estate attorney.
2. When may the personal representative sell estate property?
A decedent’s will may designate the manner in which estate real property is to be sold or identify the particular property to be sold. Absent a court order based upon the best interests of the interested parties to the contrary, the personal representative shall comply with the decedent’s instructions. If the will is silent on these matters or there is no will, the personal representative may select the method of sale and the particular property to be sold. Estate real property may be sold by private sale, public auction, or a different method specified in the will of the decedent (Cal. Prob. Code §§ 10000.3, 10303). A private sale is one in which bids or offers are independently solicited, while a sale by public auction invites concurrent competitive bidding.
3. Are there any restrictions on the sales price of estate real property?
Yes. The sales price of a private sale of estate real property subject to court confirmation must be at least 90 percent of its appraised value set within one year prior to the sale (Cal. Prob. Code § 10309). All terms of a sale, including the minimum required deposit, are generally subject to court approval and local rules of court which vary from county to county. Many courts require a 10 percent deposit at the confirmation hearing in the form of cash or a certified check. Generally, offers with contingencies of any sort (e.g., financing, sale of home) are not approved by the court. Sales of real property sold under the IAEA do not have the same restrictions and may contain all of the same contingencies and provisions as non-probate sales of real property (Cal. Prob. Code § 10503).
4. What is a “Notice of Sale” and is it required prior to selling estate real property?
5. What is meant by court confirmation of the sale of real property?
The personal representative is required to report the sale and petition the court for confirmation of the sale within 30 days of accepting an offer (Cal. Prob. Code § 10308). Should the personal representative fail to perform these acts in this time period, the purchaser may do so on his or her own behalf (Cal. Prob. Code § 10308(b)). All estate real property sales must be confirmed by the court except for sales of property under the IAEA.
At the confirmation hearing, the original sale may be subject to being overbid by another purchaser (Cal. Prob. Code § 10313). The court will confirm the sale to either the original bidder or to an over bidder and normally approve payment of the brokerage commissions. Title will pass to the successful buyer only after the terms of sale have been met, the court has confirmed the sale and the personal representative has executed a conveyance to that buyer (Cal. Prob. Code § 10314).
6. Will credit offers (subject to a loan) or other contingent offers on estate real property be confirmed by the court?
7. Is there a minimum price for which estate real property must be sold?
8. Is there a minimum deposit required on the sale of estate real property?
9. How soon must the accepted offer be returned to the court for confirmation?
10. Is an original bid subject to an overbid at the confirmation hearing?
11. Is there a minimum amount required for an overbid?
At least 5 percent of the amount of the original bid in excess of $10,000.00.If the original bid returned to the court for confirmation is for $100,000.00, then the initial overbid must be for at least $105,500.00 (10 percent of the first $10,000.00 = $1,000.00; plus five percent of the remaining balance of that bid of $90,000 = $4,500.00; $1,000.00 + $4,500.00 = $5,500.00 which must be added to the original bid of $100,000. The resulting minimum overbid requires is $105,500. ($100,000 + $5,500).
The minimum amount of increase required after the first overbid will be set by the court at the time of the confirmation hearing. The court will accept bids in much the same manner as an auction until the highest bid available has been made at the confirmation hearing.If one prospective buyer bids a lesser cash amount and another prospective buyer bids a higher credit amount, the court cannot consider the higher offer unless the personal representative informs the court in person (or by counsel prior to confirmation of the sale) that the higher offer is acceptable (Cal. Prob. Code § 10311(d)).
12. What is the Independent Administration of Estates Act?
13.Can the personal representative’s authority under the IAEA be limited?
14. What is the difference between “limited” authority and “full” authority of a personal representative acting under the IAEA rules?
15. Is the personal representative required to inform anyone of a possible sale of estate real property when it is being sold under the IAEA?
16. How should the Notice of Proposed Action be given?
17. How can a recipient of the Notice of Proposed Action object to the sale?
18. Must the personal representative administer the estate under the IAEA if the representative has been granted the authority to do so by the court?
Which manner of sale likely produces maximum estate assets.The information contained herein is believed accurate as of April 25, 2005. It is intended to provide general answers to general questions and is not intended as a substitute for individual legal advice. Advice in specific situations may differ depending upon a wide variety of factors. Therefore, readers with specific legal questions should seek the advice of an attorney.Copyright© 2005 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Permission is granted to C.A.R. members only to reprint and use this material for non-commercial purposes provided credit is given to the C.A.R. Legal Department. All rights reserved.

References: § 10309
 § 10503
 § 10308
 § 10308
 § 10313
 § 10314
 § 10311