Probate sales take time as there are necessary court requirements including contracts, forms, due diligence, disclosures, and protocol involved. These sales are usually heavy fixers requiring work that may not qualify for traditional financing. These sales can also be accompanied with tough sales terms such as death on property, larger earnest money deposit (10%), no termite, no retrofit, no home warranty, no loan contingency, no contingent sale, appraisal contingency, or inspection contingency. Court confirmation is subject to overbidding of other potential buyers. Probate sales are always “AS IS” with no seller credit. Sellers prefer cash offers since the property is usually in poor condition and may not qualify for a loan.
If the probate does not require court confirmation, the escrow time frame will be conducted as a standard sale of 30-45 days. If it requires court confirmation, the sale takes longer than traditional real estate transactions.
In making an offer, there are required Probate forms necessary, and the offer must accompany 10 percent of the initial deposit. The offer is presented to the estate representative who will then accept, counter, or reject the offer as with traditional sales. However, the offer is subject to the court’s confirmation despite seller accepting buyer’s offer. The probate attorney and estate representative will then petition the court to confirm the sale. Upon receipt of the sale date, all parties must wait at least 45 days. The estate must be properly marketed at the new accepted price. In California, the court raises the accepted offer which then becomes the new probate price to be marketed. The court requires the new buyer, plus any interested parties, to attend probate court for the sale to be confirmed. If there are more interested parties, the property is then sold auction-style through court with the opening bid being the accepted offer price in addition to 10% of the first $10,000 plus 5% of the balance.
Buyers of a probate estate must remember since seller is deceased, there usually isn’t anyone to disclose much about the property that may negatively affect the property’s value. This is a possible risk. To overcome this, it’s best to have the property inspected before writing an offer. Overall, it’s better to gamble the cost of a home inspection than to write an offer without knowing possible costly issues.
Steve Davis is a 30-year veteran of the real estate industry, and recognized real estate expert. Steve has completed hundreds of transactions totaling more than $300M. Additionally, Steve’s team adds over a decade of experience in the Probate and Trust sales arena. In working with the Steve Davis Team, rest assured a well-qualified team will earnestly represent the probate estate, clearly communicate with legal counsel, update clients throughout, and diligently follow relevant protocol pursuant to Probate Code within California Law.
Disclaimer: This is not legal advice. Consult with a legal professional when dealing with matters discussed above. If you do not have trusted legal representation, contact Steve Davis Team and we will be happy to refer you to carefully selected legal advisors specializing in the desired area of need.
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Steve Davis Estates is a licensed real estate broker (00986011)independently owned and operated in the State of California, and abides by Equal Housing Opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdraw without notice. No statement is made as to accuracy of any description. All measurements and square footages are approximate. Exact dimensions can be obtained by retaining the services of an architect or engineer. This is not intended to solicit property already listed.
