Source: http://www.century21woodranch.com/SimiValleyProbateRealEstate.html
Timestamp: 2019-04-19 12:20:04+00:00

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If you have reached this page, you have probably lost a loved one and this is a difficult time for you and your family. I understand exactly what you are going through and you need all of the support available to you. I can be a resource for you, especially if you are not in the area. I have additional training and experience in Probate Real Estate and I can provide important services such as securing the property, evaluating the price, clean-out of unwanted belonging, turning on utilities, and coordinating needed repairs, I have referrals for attorneys, paralegals, locksmiths, inspectors, appraisers, contractors, and anything else you need.
Q 1. Can you give me a general description of how a sale of real property in probate works?
Q 2. When may the personal representative sell estate property?
(Cal. Prob. Code § 10000.)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.
Q 3. Must the personal representative list the estate real property with a real estate broker?
A The personal representative may legally market and sell real property without the services of a broker, as if he/she were the owner of the property. The personal representative is considered the “seller” in the transaction. However, the personal representative may list the property with a real estate broker. The process of listing, marketing and selling probate real property is much the same as any sales transaction with some exceptions discussed below. Unless the personal representative has full authority under the IAEA, a sale is subject to confirmation by the court.
Q 4. Are there any restrictions on the sales price of estate real property?
A 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. Generally, offers with contingencies of any sort (e.g., financing, sale of home) are not approved by the court. Sales of real property by the personal representative with full authority 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).
Q 5. Are prospective purchasers required to submit a deposit of 10% of the purchase price when submitting a purchase offer on a probate property or at the confirmation hearing?
A California law does not require a 10% deposit. Some personal representatives may request such a deposit which reflects the preference of those persons and the traditional practice in many areas. When listing a property an agent may wish to discuss with the personal representative the pros and cons of asking for a lower deposit amount which could possibly result in more and/or higher offers.
Q 6. What is a "Notice of Sale" and is it required prior to selling estate real property?
A A Notice of Sale must be published prior to the sale of estate real property unless the will directs the real property to be sold or gives authority to the personal representative to sell the real property or the personal representative has full authority under the IAEA. The Notice of Sale provides the public with required information concerning the sale and will typically be handled by the attorney for the estate. The contents of the Notice of Sale can be found in Probate Code Section 10304.
Certain sales are exempt from this requirement, most importantly, sales by a personal representative with full authority under the IAEA (Cal. Prob. Code § 10503—the property may be sold with or without notice).
Q 7. What is meant by court confirmation of the sale of real property?
A 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 by a personal representative with full authority 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 overbidder 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).
Q 8. May the personal representative enter into a contract with a licensed real estate broker to sell estate real property?
A Yes. The personal representative may enter in to an exclusive right to sell contract with a broker for an original period of not more than 90 days plus one or more extensions each limited to the same periods (Cal. Prob. Code § 10150(c)). This real estate broker may cooperate with other brokers and may advertise the property on the MLS (Cal. Prob. Code § 10150(a)). Prior court approval must be obtained for each extension unless the personal representative is acting under IAEA. However, even here, if the personal representative has obtained only "limited" power rather than "full" power to administer the estate, court supervision of the sale of real property is required (Cal. Prob. Code § 10501(b)).
Q 9. May a listing broker obtain an extension of the listing contract if the estate real property does not sell within the original listing ninety day period?
Q 10. Is there a required form that must be used for listing estate real property?
A No. For sales under the IAEA any exclusive authorization and right to sell form is acceptable such as California Association of REALTORS® (C.A.R.) standard form listing contracts: RLA, RLAA and RLAN.
Q 11. Is compliance with the agency disclosure laws required in the sale of estate real property?
Q 12. Must the personal representative transferring estate real property complete a Real Estate Transfer Disclosure Statement (TDS) or provide other disclosures?
A Sellers of estate real property (and mobilehomes) are exempt from the requirement of providing prospective buyers with a transfer disclosure statement (Cal. Civ. Code § 1102.2(b)). This does not, however, relieve the seller from disclosing any known material facts regarding the value or desirability of the property.
Q 13. Is a licensee required to conduct a visual inspection of residential estate real property that is offered for transfer?
A Yes. A licensee involved in the transfer of residential one-to-four unit estate real property interests (including mobilehomes) is required to conduct a reasonably competent and diligent visual inspection of all accessible areas of the property and to disclose to prospective buyers all facts materially affecting the value or desirability of the property that the inspection reveals (Cal. Civ. Code § 2079(a)). Although not required by the statute, the disclosure should be made in writing.
Q 14. How is the listing broker‘s commission established?
A The listing agreement usually specifies the amount of commission as a percentage of the sales price. The court will determine, in its discretion, what is a reasonable commission (Cal. Prob. Code §§ 10150((b), 10161(a)). However, the court may not approve an amount in excess of the maximum percentage established by local court rules. This amount can be determined by contacting the clerk of the probate court of the county in which the estate is being administered.
Q 15. When does an estate become liable for a commission to the listing broker?
Hence, brokers are never entitled to a commission in a probate sale until the estate receives the purchase price, the deed is transferred to the buyer and a mortgage or deed of trust is taken for payments due in the future (Cal. Prob. Code § 10160 (Law Revision Comm'n Comment)).
Q 16. Can different brokers involved in the sale of estate real property determine how the commission will be divided between them?
A Yes. The court must honor an agreement between brokers concerning the division of a commission (Cal. Prob. Code § 10168). However, the court has discretion to limit the total amount of commission paid by the estate.
Q 17. Does such a commission split agreement between brokers have to be in writing?
A No. Oral agreements between brokers concerning commission splits can be enforceable. However, mere verbal terms are often disputed and difficult to prove. A separate, written commission agreement between the brokers is highly recommended to avoid any misunderstanding.
Q 18. Is an offer of compensation in the Multiple Listing Service (MLS) an enforceable "agreement" between brokers to split commissions?
The listing office may also specify the amount of compensation going to the first cooperating office (unconfirmed cooperating broker compensation-"ucb") if the accepted offer is overbid at the court confirmation hearing. (Cal. Model MLS Rule § 7.15.1.).
Q 19. Can the court, at the confirmation hearing, alter a commission agreement between cooperating brokers?
A If cooperating brokers have entered into a commission agreement, the law mandates that the court honor it (Cal. Prob. Code § 10168). If all brokers agree in court to the terms of a prior oral or written agreement to split a commission, there should be no reason for the court to alter it. An exception however could arise if commission agreement between the brokers exceeds local court rules limiting the commission amount as paid by the estate.
Q 20. Is there a comprehensive summary of rules concerning how much commission a broker earns on the sale of estate real property?
A Yes. The C.A.R. legal article titled California Probate Code Commission Schedule is a chart that specifies the amount of commission a broker is entitled to whether the property is exclusively or not exclusively listed, and when confirmed to the original bidder, or confirmed to an overbidder. The chart also specifies a broker's amount of commission in the event of a successful bid or overbid as obtained by the estate‘s personal representative.
Q 21. Can a real estate licensee receive a commission when buying estate real property as a principal?
Q 22. What is the broker‘s recourse when the court fails to award the broker a commission at the confirmation hearing?
Q 23. What happens if the broker‘s commission is confirmed by the court but remains unpaid?
A If the estate fails to pay the broker a commission awarded by the court after the escrow has closed, the broker becomes a creditor of the estate. The broker may then institute proceedings to require payment. The court may at any time order an accounting by the personal representative of estate monies received and expended, including data on claims filed or presented to the estate.
Q 24. What happens if there is a dispute between brokers over the agreement to split commission?
A Generally the probate court will not interpret an agreement between cooperating brokers regarding the split of commission. If upon request the court does not specifically split the commission, the cooperating brokers should resolve their dispute through the Board/Association arbitration system like any other commission dispute.
Q 25. How should an offer be submitted on estate real property?
Q 26. To whom should an offer be submitted?
Q 27. Who has the power to accept an offer concerning estate real property?
A The personal representative of the estate has the power to accept an offer. However, any acceptance is subject to court confirmation, unless the sale is made under the Independent Administration of Estates Act by a personal representation having full authority to administer the sale.
Q 28. When may offers be submitted on the sale of probate estate real property?
A Offers may be submitted at anytime. An offer received by the listing broker at any time before a sale closes must be presented to the personal representative, unless the personal representative has expressly instructed the broker not to present it, or unless the offer is patently frivolous. Whether the offer is patently frivolous depends on the facts and circumstances at the time of the offer. The licensee's safest course of action is to submit all offers of this type to the personal representative for his/her own determination.
Q 29. Will credit offers (subject to a loan) or other contingent offers on estate real property be confirmed by the court?
A Acceptance of a contingent offer is quite rare in probate sales. Acceptance of a credit offer is subject to court approval (Cal. Prob. Code § 10315). In addition, the court may also permit seller financing (by the estate) (Cal. Prob. Code § 10315). An offer with any contingency may be accepted by the personal representative, subject to court confirmation, which will usually require a demonstration of evidence that the property cannot be sold without the contingency. The personal representative may also consider accepting an offer with a contingency provided the prospective purchaser removes the contingency before the offer is submitted to court. Under IAEA full authority, no rules specifically prohibit a contingent sales contract.
Q 30. Is there a minimum price for which estate real property must be sold?
A Generally, yes. Without full authority under IAEA, the minimum offer price for a private sale of real property must be at least 90 percent of the appraised value of the property (Cal. Prob. Code § 10309(a)(3)). The appraisal must have been made within one year prior to the date of the confirmation hearing (Cal. Prob. Code § 10309(a)(2)).
Q 31. Is there a minimum deposit required on the sale of estate real property?
A Generally, yes. Except under IAEA full authority, all terms of a sale including the minimum required deposit are 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, cashier’s check, or a certified check.
Q 32. How soon must the accepted offer be returned to the court for confirmation?
A The personal representative is required to file a report of the sale and petition the court for confirmation of sale within 30 days after acceptance of the offer unless acting under IAEA full authority (Cal. Prob. Code § 10308). If the representative refuses or fails to do so within the 30 day period, the buyer may proceed to file the report and petition the court for confirmation of the sale. The buyer, of course, should consult a personal attorney if the buyer feels it is necessary to petition the court. (Cal. Prob. Code § 10308).
Q 33. Is an original bid subject to an overbid at the confirmation hearing?
A Yes unless the sale is under full authority of IAEA. Another prospective purchaser may attend the confirmation hearing and submit to the court a higher written offer, called an "overbid," to purchase the real property (Cal. Prob. Code § 10311).
Q 34. Is there a minimum amount required for an overbid?
Q 35. What is the Independent Administration of Estates Act?
Q 36.Can the personal representative's authority under the IAEA be limited?
A Yes. The court can grant the personal representative full or limited authority under the IAEA (Cal. Probate Code § 10454(a)). If the personal representative has limited authority, court supervision is required for the sale, exchange or granting of an option to purchase estate real property (Cal. Prob. Code § 10501(b)). If the personal representative has full authority, court supervision for the sale, exchange or granting of an option is only required if the personal representative or estate‘s attorney is the principal buying, exchanging with or optioning the estate property, or, if objections are made to the Notice of Proposed Action (Cal. Prob. Code § 10501(a)).
Q 37. What is the difference between "limited" authority and "full" authority of a personal representative acting under the IAEA rules?
A If the court grants only limited authority to the personal representative, he/she has the power to do all acts allowed under the IAEA rules except the power to: (1) sell real property, (2) exchange real property, (3) grant an option to purchase real property; or (4) borrow money with a loan secured by an encumbrance on real property (Cal. Prob. Code § 10501(b)). With limited authority, court supervision is required.
Q 38. Are the price and terms prescribed by law when estate real property is being sold under the IAEA?
Q 39. Is the personal representative required to inform anyone of a possible sale of estate real property when it is being sold under the IAEA?
Q 40. How does the personal representative notify the above-named parties and what information must be included in the Notice of Proposed Action?
Q 41. How should the Notice of Proposed Action be given?
Q 42. How can a recipient of the Notice of Proposed Action object to the sale?
A Anyone entitled to receive the Notice of Proposed Action can object to it by delivering or mailing a written objection to the personal representative at the address in the notice. (Cal. Prob. Code § 10587(b)).
Q 43. Must the personal representative administer the estate under the IAEA if the representative has been granted the authority to do so by the court?
Q 44. How does a sale conducted under the IAEA affect a licensee‘s rights and duties?
Q 45. Where can I obtain additional information?
The information contained herein is believed accurate as of October 3, 2013. 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.
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References: § 10000
 § 10309
 § 10503
 § 10503
 § 10308
 § 10308
 § 10313
 § 10314
 § 10150
 § 10150
 § 10501
 § 1102
 § 2079
 § 10160
 § 10168
 § 7
 § 10168
 § 10315
 § 10315
 § 10309
 § 10309
 § 10308
 § 10308
 § 10311
 § 10454
 § 10501
 § 10501
 § 10501
 § 10587