California regulates certain aspects of a probate sale when it comes to the sale of real estate property. This includes how the property is sold, what it is priced at, and even how quickly it must be sold. The terms of these transactions are heavily regulated in the state of California and can be confusing to individuals that are anticipating going through the process. However, an established estate planning attorney can assist you in navigating the process.
What is Probate?
Probate is the process that is initiated by a court system when there are assets that need to be distributed. Assets may need to go through probate with or without a will, depending on the individual situation. Probate may be utilized to determine the inheritors of a will or to review the overall assets, as well as the deceased person’s liabilities or remaining debts. While in some instances probate may be able to be avoided, that is not always the case. This is especially true if an individual has an estate that is considered high-value.
How Probate Works
Probate is the transfer and legal analysis of assets that were previously owned by someone who is now deceased. This will often include beneficiaries or those who might feel entitled to be named as a beneficiary. Assets and beneficiaries are then reviewed within probate court. The court, at the end of the proceedings, will provide a final ruling. As part of the estate planning process, many individuals will pass away having some record and documentation of how they would like their assets distributed. In some cases, the person that passes away will not have any documentation. Probate may sound cut and dry, but can actually be a complex process. The process can also be emotionally and financially taxing for family and friends of the deceased.
Can I Purchase a House in Probate in California?
Yes! In California, due to the probate process, you can buy a home that is on sale as a result of probate. Homes that are being sold through this process are often listed under-market value. This is because those that need to liquidate assets are typically trying to do so as quickly as they can.
How Can I Conduct a Probate Sale in California?
California’s probate sale regulations are specific. After your loved one has passed away, you may need to sell some of their real estate or property as part of the probate process. The regulations put forth by the state of California dictate everything from the way the property is sold to the time limit that you have in order to complete the sale.
Real Estate Agency. Selling a property through probate with a real estate agent is the most common way. It is also considered by many to be the easiest. This is due to the executor or administrator of the estate to not need to handle all aspects of the selling process. Instead, designating that role to a real estate agent or broker. The real estate agency will then be responsible for any necessary inspections and documentation regarding the status of the property. In California, there are a host of disclosures and other issues that may come up when handling a real estate transaction. A real estate agent will help navigate some of these issues.
Private Sale. In some instances, it might be more beneficial to skip using a real estate agent. Utilizing a private sale is also an option. When selling a property under probate as a private sale, the property can be listed in legal newspapers. A dedicated estate planning attorney can ensure that the property is listed properly and in all advantageous avenues. Private sale generally involves a bidding process with the attorney opening the bids.
Public Auction. A public auction is another avenue for a probate property sale. This one also involves bidding. With a public auction, the public is notified ahead of time of where and when the auction will take place. Those who are at the auction will bid in real-time on the property. The property will then go to the highest bidder.
Private Auction. A private auction is similar to a public auction. However, a private auction is done privately through an auction company.
Through a Trust. A trustee will have the authority to determine how the property was sold if the property was placed inside a trust.
How is The Price of a Property Determined?
In a typical sale of a property, the seller can determine how much to price the property at. However, with a probate sale, that is not the case. The terms of the sale may need to be approved by the court before the sale process can begin. Generally, once the property has been put on the market, an offer to purchase the property will need to be 90% of the appraised value. Before an offer can be officially accepted, it may need to be approved by the court. If the court’s involvement is necessary, even when an offer is accepted, the public can attend the hearing and still bid on the property.
How Quickly Does The Property Need to be Sold?
If working with a real estate agent, the agent will have 90 days to handle the property. If the property does not sell, there may be up to two 90 day extensions allotted. When taking IAEA property sales in California into consideration, the state uses the California Association of Realtors standard for listings. When a probate property is listed, it will need to include probate sale documentation to inform buyers that it is a probate sale.
Schedule a Consultation with a Professional Estate Planning Attorney
Conducting a property probate sale in the state of California can feel overwhelming. There are many different aspects to consider, as well as documentation that you may need to provide. At Galanti & Copenhaver, Inc., we know that you already have enough on your plate because we understand how complicated the estate planning process can be. Our professional team is well-equipped to understand your own unique individual needs to assess viable solutions. We are ready to answer any questions you have about the estate planning process, including probate sales. Schedule an initial consultation today to speak with a member of our team!