There are two basic types of probate sales: those that require court confirmation and those that don't. If the court requires confirmation, then the property will generally be listed to attract buyers, but will have to finish in the confirmation process where bidding occurs as pre-established levels. If the court appoints an independent administrator and confirmation is not required, then the sale proceeds similarly to a regular transaction. There are lots of other details, but I think this is the main consideration.
The administrator or executor will generally work with a Realtor to establish the list price, but the court will have engaged an appraiser, so there is a guideline to work with. Offers cannot be less than 90% of the court referee's appraisal. Depending on the type of property, you may want to gather certain kinds of reports. The disclosure requirements are a little bit different than in a regular transaction, but generally your Realtor would work with you to prepare these items and market the property as broadly as possible.
From here it just depends on whether confirmation is required.
I would suggest that you interview/engage Realtors with probate sales experience for more detailed information. Court deadlines are unforgiving, so having someone with experience is a real benefit.
Good luck to you!
McGuire Urban Bay
There are two types of probate sales. The first is known as IAEA (Independent Administration of Estates Act.) This is where the executor-administrator has full authority of sale. In this case, the sale is treated much like a regular sale. The executor-administrator, however, is exempt from disclosure, unlike an ordinary sale. All heirs must be notified in writing of the sale, and would have 15 days to object to the sale. If this occurs, the sale would most likely need to go to court for confirmation.
The second type of probate sale involves court confirmation. The executor or administrator of an estate of a decedent may sell the real property of the estate where it is found to be in the estate's best interests. The representative of the estate may initiate a probate sale by seeking offers to purchase directly or through a Real Estate Broker. In both cases, the real property offering must be advertised by the publication or posting of a notice. Acceptance of an offer by the estate representative Is subject to probate court confirmation. The representative of the estate, with court permission, may grant an exclusive right to sell the property for a period not to exceed 90 days.
An offer to purchase must be for a price which is not less than 90 percent of the property's appraised value. When an offer is accepted, subject to court confirmation, the representative will petition the court to confirm the sale. When the court has set the matter for hearing, any interested person may bid at the time of the hearing. To open the bidding, there must be an increase over the bid returned to the court for confirmation which is at least 10 percent of the first $10,000 bid and five percent of the bid in excess of $ 10,000. Once the bidding has been opened, the court in its discretion may permit the bidding to continue on lesser raises until it declares a bid to be the highest and best obtainable. The sale then will be confirmed by the court to the maker of that bid. Ordinarily after court confirmation of a sale, normal escrow procedures are used to consummate the transaction on the terms and conditions approved by the court.
I hope that helps answer your question. Please let me know if I can help.
Zephyr Real Estate-SOMA
1. Find good representation.
2. Gather as much info as possible on the value of the property, the tax consequences to the heirs or the Estate.
3. Consult an experienced REALTOR or two for marketing ideas and property values.
If this is a Court Sale, the Court may require an appraisal on the property by a fee appraiser.
If you want recomendations for fee appraisers and attorneys, give me a call.
If you are looking to buy a Probate Property, you need to know the specific details of the sale and have good representation. Also, the buyer often pays the Seller's Transfer Tax in San Francisco on probate sales.
Probate properties are usually sold "AS IS" with minimal disclosures so "buyer beware.".
If you are a buyer, there are some successful strategies that I've used for clients to get them probate properties at a substantial discount. If this is of interest to you, feel free to contact me.
TRI Coldwell Banker, SF's #1 Office
Either way the sale has a few other variations in forms and marketing so it helps to work with an agent that knows how to do both.
Contact me if you have questions.