Assisting Sellers with the following:
Probate means there is a court case that deals with:
transferring the property of someone who has died to the heirs or beneficiaries;
Deciding if a will is valid; and
Taking care of the financial responsibilities of the person who died.
In a probate case, an executor (if there is a will) or an administrator (if there is no will) is appointed by the court as personal representative to collect the assets, pay the debts and expenses, and then distribute the remainder of the estate to the beneficiaries (those who have the legal right to inherit), all under the supervision of the court.
If the estate has decided to sell a property, it will either be a Probate Sale with court confirmation or without court confirmation.
Trust Sales vary:
If the property is held in a trust and the trustees live at the property, it is almost like a regular sale aside from a few differences in required paperwork.
If the Seller has inherited the property then they may have limited information or knowledge about the property to disclose to the new buyer. As a buyer you would do your due diligence, do a home inspection so you feel informed and comfortable moving forward.
These conservatorships are based on the laws in the California Probate Code. They are the most common type of conservatorship. Probate conservatorships can be:
You Want to buy a Probate Property...
What you need to know:
The property is typically sold “as-is”.
Oftentimes there are limited-to-no contingencies on a probate sale.
Oftentimes no repairs are done to the property. If the "Seller" wanted to do repairs they most likely would have addressed them prior to putting the property on the market.
Customarily the seller pays for their share of the escrow fees, the title insurance policy for the buyer, City and Country transfer taxes (if applicable), any outstanding property taxes or liens against the property at close of escrow.
Customarily the seller pays the listing agent and successful buyer agent's commission out of the proceeds of the sale at the close of escrow.
If court confirmation is required, the court must ultimately approve any offers accepted, and a 10% good faith deposit is typically required upon acceptance from the purchaser.
Once the court accepts an offer, the escrow close date is set. Typically a minimum of 30-45 days sometimes a little longer.
If no overbid is required, proceed to close.
If overbid is required, do inspections, then wait for the court date. If you are not the winning bidder, the money you spent on inspections is non-refundable.
If an overbid is required, other interested buyers can go to court with a cashier's check and pay more than what you offered. The process is very transparent, you stand next to the other buyers and you see what they are willing to pay and decide what your limits are.
How to determine a minimum overbid amount:
How do you determine the minimum bid in court at the court confirmation hearing?
The minimum first overbid price is set by a statute in the Probate Code. Calculating the overbid assumes that there is an accepted offer on the property. The minimum overbid amount is 10% of the first $10,000 plus 5% of the balance of the accepted offer. The overbid must be presented in person by cashier’s check (no personal checks). If a property is highly desirable, there may be more than one overbidder. In that case, an overbid above the minimum would be to the advantage of the potential buyer. Here’s an example of how the overbid and deposit amount are determined:
EXAMPLE: A property is listed at $500,000. The accepted offer is $500,000.
The minimum overbid is calculated as follows:
Accepted offer = $500,000
take 10% x of the first $10,000 = $1,000
take 5% x of the remaining balance $490,000 = $24,500
Minimum overbid = $525,500
Bring a check for 10% of the first minimum overbid x 10% = $52,550 amount of cashier’s check
You need a cashier's check made payable to the Estate in order to overbid in court
Bring a personal checkbook to cover any differences should you be the winning bidder and it goes over the first minimum overbid.