It’s known as Probate for a Good Reason

REALTOR® Outlook

By Kay Wilson-Bolton

July 21, 2010

Once in a while, a property comes on the market and must be sold under the authority of one to conduct a probate sale.

The terms of a probate sale are a little different and often irritate people who are not accustomed to it.

Simply stated, estate administration provides for the orderly distribution of real and personal property owned by someone who dies, known as decedent.

Any property which the decedent owned or in which the decedent had an interest at the time of death is collected into the estate and distributed to those entitled to it after all debts and expenses have been paid.

The process of administering a decedent‘s estate is referred to as “probate,” and is generally supervised by the probate court.

A personal representative is the person or entity charged with the responsibility of administering a decedent’s estate. A personal representative is either an executor/executrix who is named in a will; or an administrator/administratrix who is appointed by the court when there is no will, when the will does not name an executor or when the named executor is unable or unwilling to serve.

It’s often not an easy job and can require some painstaking work to do it well.

The personal representative is charged with the fiduciary responsibility of gathering the assets and paying the debts of the decedent so that the beneficiaries or heirs of the decedent receive the maximum inheritance.

The personal representative usually will hire an estate attorney to handle the legal aspects of the probate. Most business dealings are through the estate attorney or the Public Administrator.

Estate property may be sold by the personal representative when the sale is necessary to pay debts, devises (gifts to persons named in the will), a family allowance, expenses of estate administration, or taxes.

The sale is to the advantage of the estate and in the best interests of the interested persons. The property must be sold according to the terms of the will; or authority is given in the will to sell the property.

A decedent’s will may designate the manner in which estate real property is to be sold or identify the particular property to be sold. Absent a court order based upon the best interests of the interested parties to the contrary, the personal representative shall comply with the decedent’s instructions.

Estate real property may be sold by private sale, public auction, or a different method specified in the will of the decedent

A private sale is one in which bids or offers are independently solicited, while a sale by public auction invites concurrent competitive bidding.

The personal representative may legally market and sell real property without the services of a broker, as if he/she were the owner of the property. He/she may list it with a real estate broker.

The process of listing, marketing and selling probate real property has some exceptions. The sale is generally subject to confirmation by the court.

There are restrictions on the sales price of a private sale of estate real property. The sale is subject to court confirmation at least 90 percent of its appraised value set within one year prior to the sale.

Many courts require a 10 % deposit at the confirmation hearing in the form of cash or a certified check.  Generally, offers with contingencies are not approved by the court.

A Notice of Sale must be published prior to the sale of estate real property, and it provides the public with required information concerning the sale and will typically be handled by the attorney for the estate.

A Notice of Sale of real property must be published at least three times over a period of not less than 10 days before the sale, with the third publication at least five days after the first.

All publications must be in a newspaper published at least weekly in the county in which all or some of the property is situated.

The personal representative is required to report the sale and petition the court for confirmation of the sale within 30 days of accepting an offer.

All estate real property sales must be confirmed by the court except for sales of property under the IAEA.

At the confirmation hearing, the original sale may be subject to being overbid by another purchaser.

The initial overbid must exceed the original bid according to the following formula: the amount of the original bid, plus at least 10 percent of the first $10,000 of the original bid; plus at least 5 percent of the amount of the original bid in excess of $10,000.00.

Fortunately the California Association of Realtors has provided great forms for REALTORS® and the public who want to participate in the purchase of a probate home.

Beneficiaries would find more chaos than cash if the rules for probate sales were not in place.

Kay Wilson-Bolton has been a real estate broker since for more than 3 decades. She serves the public in a variety of venues from shortsale consultation to mediation to critical incident stress management.  She can be reached at 805.340.5025 or www.realestatemagic.com

 

About Kay Wilson-Boltonhttp://www.kaywilsonbolton.netWith a full-time career in real estate, I can add to your bank of knowledge, not only in real estate but in many areas of life that deal with people and relationships and choices. My real estate career has taught me many lessons about planning ahead and looking forward. I believe in helping along the way so that they can be the best they can be in any situation. I serve as a Fire Department Chaplain and Coordinator for the Many Meals Project which serves homeless and hungry families in my community. The event is far more than many meals. As a result of my work with the homeless population in my community, I received the Good Neighbor Award 2017 from the National Association of Realtors and named as a Champion of Homes in 2015 by the California Association of Realtors. I make pastoral visits to the inmates in the County Jail System and offer them what God says about "all things being new" and His remarkable plan for our lives. I have served my community as Mayor and in many volunteer capacities. I serve others by serving God first. My husband is involved in prison ministry and is a graphic artist. We live a simple life in Santa Paula with an office cat named Scout, three rescued poodles and a cat named Tony Diane at home.

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