I read a good piece on Zillow about the probate sale process and I thought I’d share it. Here it is from Zillow:
The Probate Selling Process
The probate process is a potentially difficult series on negotiations and court hearings creating family tension. There are three main ways a probate is handled in relationship to real estate sales.
- Independent Administrator with full powers
- Independent Administrator with limited powers
- Court confirmation
In any event, all of these can end up in court.
Probates usually include but are not limited to the following sequence of events.
- Appointment of an Administrator or Executor
If there is a Will that nominates an Executor, and that person is willing to serve, they will be appointed as Executor. If there is no Will, or the Will does not nominate an Executor who is still alive and willing to serve, then administrator is appointed. This is usually one of the heirs, someone nominated by an heir or the Public Administrator. An Executor and Administrator have the same responsibilities, and I will use the term Executor from now on.
2. The sale of property
There are two different procedures that are followed, depending on whether the Executor has been granted “full independent powers”. If the Executor has full powers, they may, but are not required to, elect to use the following procedure. They list the property for sale. Once they have an acceptable contract, they mail out a Notice of Proposed Action stating the terms of the proposed sale. The heirs then have 15 days to object. If there is no objection within 15 days, the sale goes through without a court hearing required. If the Executor does not have Full Independent Powers, or an heir objects to a sale under the Notice of Proposed Action method, then the following procedure applies. A notice of the sale must be published in a newspaper of general circulation (unless there is a will that waives this requirement).
3. Accepting an offer
The offer must be 90% or more of the Probate Referee’s appraisal. Once the offer is accepted the buyer’s 10% deposit is potentially forfeited if the buyer cannot perform.
4. Court confirmation
Once an offer is accepted, a petition seeking confirmation of the sale is filed with the court and a hearing is set. The court hearing usually takes place 30-45 days after the petition is filed. A copy of the petition and details about the offer and sale are mailed to all heirs.
At the court confirmation hearing, the accepted offer may be overbid by other buyers. The buyer who had the accepted offer being confirmed may also participate in the overbidding. The minimum overbid is 10% of the first $10,000 plus 5% of the balance up to the accepted offer. A cashiers check for 10% of the minimum overbid amount must be shown to the court in order to make an overbid. That check is given to the Executor at the hearing by the winning bidder. A contract is then signed. This contract can have no contigencies and escrow usually closes within 15 days after the hearing.
There are many other details not mentioned here. It depends upon the jurisdiction and Executor. Some are:
- What contract is used for the offer
- To whom should the 10% deposit check be made payable to?
- Do private attorneys and Public Administrators have different requirements?
- What disclosures are required?
- Where are court conformation hearings held?
- What makes an offer weak or strong?