A California probate property sale can overwhelm even the savviest owners and investors with regulations that seem twice that of a regular residential home sale. The unfamiliarity is understandable, considering probate is not an everyday occurrence for most individuals dealing in real estate transactions.
But even with a probate sale's extended timeline and additional rules and considerations, a little understanding goes a long way to ensuring a successful, stress-free transaction. Let's explore several key aspects of California's probate process and tips when selling a probate property.
What is probate?
What is a probate property sale, and how can selling probate property be advantageous?
Effectively, a house and the land on which it sits are real property, while all movable items are considered personal property. For example, a home's built-in HVAC system is real property as it is a structural and integral part of the residence. Kitchen appliances and furniture are considered personal property.
In California, a decedent's real property can transfer without the need for official probate proceedings if an estate's total value is less than $184,500 or if the property has a named beneficiary or if the title has someone else's name on it, such as a spouse or domestic partner (community property).
Selling probate property can be advantageous for a variety of reasons. Foremost, it allows the executor of the estate to settle any debts and distribute the remaining assets to any of the decedent's beneficiaries more quickly. A probate property sale also simplifies the administration of the estate, which, in many cases, makes it easier for involved parties to understand their rights and responsibilities.
Be patient with the timeline, and plan accordingly
Of course, as with any major real estate transaction, an array of variables can influence the overall process and either shorten or prolong the sale. The most important advice here is to remain patient with the process.
Remember that a property sale is just part of the larger probate process. It's a journey that can prove emotionally draining and grants you limited control over the process. Exercising tolerance of the timeframe and staying organized with any responsibilities relating to the sale will promote a stress-free transaction.
Familiarize yourself with the two types of probate authority you'll encounter
- Interview a qualified probate agent/broker
- Determine list price (no court limitation)
- Execute a listing agreement
- Market the property
- Execute probate purchase agreement (acceptance of the offer)
- Distribute Notice of Proposed Action
- Open estate bank account
- Close escrow
Determine list price: The final sales price of a limited authority probate sale must be within 90% of the property's appraised value
Notice of Sale: During the property's marketing, a "Notice of Sale" must be published at a minimum of three times over a period not less than 10 days before the sale; the third publication must be at least five days after the first
Report of sale and petition for an order confirming sale: Within 30 days of an accepted offer, a Report of Sale and petition for court confirmation must be submitted to the court
Court hearing and over-bidding process: The sale is open to overbidders during the court confirmation hearing, who, with a cashier's check of 10% of the minimum bid amount, can secure the final sale without contingencies.
Court order: Approximately 15 days after the confirmation hearing, the court issues a Sale Confirmation Order triggering the escrow closing.
Understand the specifics of the Notice of Proposed Actions
A Notice of Proposed Actions provides the interested parties in a probate sale an opportunity to object to the sale. Should they oppose, a full authority probate sale will then be remedied under the supervision of the court and follow the limited authority process. To streamline the property sale, you don't have to provide a Notice of Proposed Action to any interested party who has consented, in writing, to the proposed action or who has waived, in writing, the right to a notice of proposed action.
Basic property listing and sales requirements still apply
Prepare the property for sale
Inspect the property: A thorough inspection is essential for identifying any necessary repairs or improvements.
Stage it wisely: A well-staged property makes a strong impression on potential buyers, leading to a faster sale at a higher price.
Do your research: Identifying comparable properties in the area and understanding the local market will help you set an accurate and potentially lucrative list price.
Avoid overpricing: Pricing too high can deter potential buyers, so it's wise to be realistic with the asking price.
Create an appealing listing: High-resolution images, virtual tours and professional videos, and engaging property copy will attract a broad range of potential buyers.
Utilize various channels: Widen your reach with a multichannel marketing plan that includes online listing services, social media visibility, and a dedicated website and landing pages.
What to disclose to buyers
Transparency is vital during disclosures as you may not be familiar with the probate property and cannot accurately report any deficiencies. To avoid the appearance of glossing over a property's less appealing traits, order a pre-sale inspection to identify problems, tackle easy-to-address items, and disclose the rest.
Connect with a trusted team of experts
With expertise in probate, conservatorships, trusts, bankruptcy, and receiverships, and hundreds of satisfied clients, The CREM Group has the knowledge and experience to help guide you through the probate real estate process. The CREM Group's proven track record of success in dealing with these hyper-specific sales in the real estate markets of Los Angeles, Orange County, and the surrounding areas will ensure your probate experience is highly successful.