At the CREM Group, we understand how complicated and cumbersome the whole process of probate real estate can be. It is because of this that our goal has been, and continues to be, to make this process as smooth as humanly possible. Facilitating the sale of probate real estate so you can be left to deal with the more pressing personal situation.
Probate real estate is by no means a simple process since it does require more steps than you could be accustomed to in a regular market transaction. Additionally, time frames are not customary in a traditional sale. That is the reason why it is so important to partner with a company that has extensive experience dealing with these types of sales. In order to give you some idea of some of the things that are involved, we are going to give you some basic information about what probate real estate sales look like in California.
What is the Process of Probate
Probate is the legal process of administering the estate of a deceased person. The primary purpose of probate is to determine the validity of a deceased person’s will and to distribute their assets in accordance with their wishes. In most cases, probate is handled by the executor or administrator of the estate. The probate process is complex and can be time-consuming. It is important for you to seek and surround yourself with qualified teams if you are the one named the executor or administrator of the estate. One of the most important assets in probate cases is probate real estate.
In the event there is probate real estate to be dealt with, the administrator will have to decide on one of five methods to choose from in order to liquidate the probate real estate. In general, in California, there are strict laws that regulate all things probate and although it can be intimidating to the person that is having to deal with this scenario for the first time, that’s where a professional and knowledgeable partner is highly valuable.
The Five Methods of Selling Probate Real Estate
Without going into too much depth but enough for a good overview, the methods to sell probate real estate are:
Real Estate Brokerage Firm Sales
By far, this is the most common way probate real estate sales are handled. Again, due to the intricacies, process-exclusive documentation, timelines, and number of players involved, most executors or administrators choose this path to alleviate some of the responsibilities they are now facing.
This method is done through the attorney that is most likely handling the probate case.
Public Auction Sales
The sale here takes place through the courthouse.
Private Auction Sales
In this scenario, the sale is much the same as the public auction with the big difference of it is being done by a private auction house. These tend to be much more expensive and only top-tier probate real estate usually applies.
A sale occurs within the constructs of a trust, which may or may not be part of a probate sale.
Who Makes The Decisions on the Sale?
In California, the courts can regulate as little or as much on probate real estate depending on a couple of important factors. The court can determine things such as price, the speed at which probate real estate is sold, and by which method. Some of these sales may require a confirmation from the court while other sales can proceed with minimal court supervision and say.
The estate’s executor or administrator could be given partial or full responsibilities and that will also dictate their ability to make decisions. Whether some probate real estate sales will require confirmation by the court or not, California strictly regulates these types of transactions and will always require approval by the court.
Important Technicalities to Know
There are some subtle differences between the California counties but in general, the sale of probate real estate will typically have to be at least 90% of the appraised market value. This is done with the analysis of an appraisal report done within the last year of the date of the sale of the property.
As far as timeframe, these sales are much longer than regular market sales and typically operate within a “90-day rule”. If more time is needed, then extensions can be provided with an additional two “90-day” periods for probate dealings to conclude. Additionally, there is typically a 10% deposit requirement on the side of the purchaser which is kept by the probate case if the sale falls through as a result of the purchaser’s inability to close.
The Importance of Choosing the Right Real Estate Brokerage Firm
When the court-appointed executor or administrator chooses a real estate firm to work with, it is in his best interest to choose a firm with the experience necessary to deal with these types of real estate transactions. Probate real estate sales involve specific disclosures, documentation throughout, and timeframes that are not like any regular market transactions. At the CREM Group, we are familiar with all of these and enjoy a great reputation as a result of helping many satisfied clients. Contact us today for a free consultation where we will show you how to best help you with your probate real estate sale.