This page will provide you with the essential details of a Successful Probate Real Estate Transaction. Probate is handled differently in each state. The information provided is based on the guidelines set forth in the State of California. Many people who find themselves with the responsibility of handling a loved one's affairs through probate may experience this type of transaction only once or twice in their lifetime.This brochure is designed for information purposes to help you understand the process.
When a person dies, the property they leave behind is generally referred to as their estate.“Probate” is the State's procedure to finalize a decedent's financial affairs and distribute his or her property to the heirs. Upon notifying the court of a person's death, the court will appoint or approve an executor,administrator or personal representative to oversee the distribution of assets.
Full or Limited Authority
The court can grant the personal representative Full or Limited Authority under the Independent Administration of Estate Act (IAEA). The IAEA is a series of laws allowing the personal representatives to administer most aspects of the decedent's estate without court supervision. If the court grants Full Authority to the personal representative, they may handle the affairs such as Selling Real Property at their own discretion. On the other hand, Limited Authority always requires court supervision.
What is a “Notice of Sale” and is it Required Before Selling Estate Real Property?
A Notice of Sale must be published prior to the sale of the estate real property unless the will directs the real property t be sold or gives authority to the personal representative to sell the property. This will typically be handled by the attorney for the estate.
When Can I Officially List the Property? If a personal representative has full powers, an exclusive right to sell listing agreement may be granted for a period not to exceed 90 days. This can be renewed subsequently every 3 months for up to 270 days.
If the personal representative does not have full powers, before the representative signs the listing agreement, a notice of Proposed Action regarding intent to list the property must be prepared by an attorney and mailed to any interested parties. The interested parties then have 15 days to object. If there are no objections,, then the listing can proceed.
Are There any Restrictions on the Sales Price of Real Estate Property?
Yes. The sales price of a private sale of estate real property subject to to court confirmation must be at least 90% of its appraised values set within one year prior to the sale.
What is an Overbid?
In a sale requiring Court Confirmation, the property s subject to an overbid. At the hearing, the judge or attorney will summarize the description of the property and terms of the sale and then entertain overbids. The first overbid must exceed the original bid by 10% of the first $10,000 and 5% of the excess.
How much Commission Does an Agent or Broker Earn on a Probate Sale?
Los Angeles County Superior Court Rule 10.93 limits commission to 5% except in the case of vacant land. Orange County Superior Court Rule 606.06 limits commission to 6% unless justified by exceptional circumstances.
We hope that you found this information helpful in understanding the Probate process. It is very important that when handling an estate real property sale that you seek the services of Real Estate Brokers or Real Estate Agents that are experienced in this type of transaction. The Alex Montelongo Real Estate Group is experienced in Probate Real Estate Sales in Los Angeles, Orange and San Bernardino Counties. We will help you understand the process and walk you through from beginning to end.
Please feel free to contact us with your questions.