Probate court confirmation of sale of real property

Many probate estates own real estate which should or is required to be sold by the executor or administrator. If the personal representative has limited powers of administration, court supervision is required to sell the estate’s real property. If a personal representative is appointed with full authority, s(he)may elect to have the sale confirmed by the Court, but is not required to do so.

A Notice of proposed action is required and must be sent to all heirs and beneficiaries. Failure to give proper notice, or provide proof that notice was received, is one of the few situations in which the Court may review the sale. The Notice of Sale of Real Property must be published when the value of the property for sale is greater than $5,000. The Notice is required to contain: the mode of sale; place, date and time of sale; and legal description of the property. A proof of publication of the Notice must be filed with the court. The heirs or beneficiaries have 15 days to object to the Sale. If no objection is made, the sale may proceed without a court hearing.

A 10% deposit is required, and the proof of deposit must be filed with the petition. The deposit should be made payable to the Estate of the decedent or an escrow company. The deposit is then available to the estate if the Buyer defaults. It is also more easily returned if the property is sold to an ‘Over bidder’ at the court confirmation hearing.

In a situation where the personal representative has limited authority, the sale must be confirmed by the court before title can be transferred to the buyer. When court confirmation is required, it is highly advisable that the personal representative enters into a contract only after the Notice of Sale is given to the heirs; otherwise, the judge may not confirm the sale. When an acceptable offer is received, it is accepted conditionally, subject to confirmation by the court.

At the confirmation hearing, the court takes into account why the sale is necessary, and its benefit to the estate. Any conditions or contingencies to the offers must be removed before the hearing because such offers are typically NOT accepted.

Under court supervision, certain restrictions apply to the listing price, acceptable offers and brokerage commissions. At the confirmation hearing, the judge reviews the original bid and inquires if any other buyers may be interested in overbidding for the property. The overbid amount is set in increments determined by the court. The court accepts the highest offer and confirms the sale and the order confirming the sale is issued by the court.

For Court confirmation of sale, the listing price is established based on the Probate Referee’s appraised value. In order for the court to confirm the sale, an offer must be at least 90% of the Probate Referee’s appraised value, established within one year prior to the confirmation hearing.

The Original Buyer must deposit 10% of the purchase price in an escrow account prior to the sale bring it to court on the day of the hearing. If the court confirms the sale to an Overbidder, the deposit is returned to the original buyer.

The court will set the overbid increments, for example, $1,000 - $2,000, etc., but the first overbid must exceed the Original Bid by 10% of the first $10,000 plus 5% of the remainder after the initial $10,000. The court shall accept the highest bid. Upon acceptance of the bid, the court approves and confirms the sale and the payment of commissions to the real estate broker(s) as specified in the purchase contract.

If you are looking for most trusted probate attorney in san bernardino county then contact Law Office of Michael C. Maddux at 909-890-2350 or fill out a Request for a free Initial Consultation

Lisa wilson is a web content writer and associated with Maddux law, a href=“http://www.madduxlaw.com/”Probate Attorney in San Bernardino. I love to write and share my knowledge on the law based article and blogs.