Probate Real Property: Summary of California Probate Real Property Sales
SALE OF REAL PROPERTY IN PROBATE:
2 methods: notice of proposed action and court confirmation
Property sold “as is”
NOTICE OF PROPOSED ACTION:
Requirements:
Personal representative must have full IAEA (Independent Administration of
Estates Act) authorityAt least 90% of appraisal amount
Process: reach agreement for sale, then send notice to all beneficiaries of sale and sale terms, if all beneficiaries agree – no court confirmation necessary
Much easier – used when family is close/no disagreements
COURT CONFIRMATION:
Requirements:
Marketing
Publication
90% of appraisal price
Filing fee
Publish notice of sale, file petition with Court to confirm, hearing date where other buyers can make “overbids”
COURT CONFIRMATION HEARING:
Overbids must be approximately 5% higher than sale price – initial overbid price will be listed in petition to confirm
Large advantage to be initial bid selected by seller (estate)
Overbidder must bring certified funds for 10% of sale price
Attorney will “qualify” overbidders in hallway prior to hearing
If overbidders – judge essentially acts as auctioneer
Overbidders must be able to actually close!! – substantial potential liability if they cannot close (lesser sale price, additional costs and attorney’s fees in starting process over again)
COMMISSION – ALSO SUBJECT TO COURT CONFIRMATION:
Usually 5% - most counties have rules that commission cannot exceed 5%
With raw land, commission can be higher
TAXES:
No capital gains – property receives “step up” in basis after death
OTHER REALTOR CONSIDERATIONS:
Cleaning up/cleaning out property
Very helpful to have “go-to” people – particularly when family not local
Fixing up property
QUESTIONS? CALL VITTAS LAW FOR A FREE CONSULTATION! 424.276.6091