During the intimidating and difficult process of navigating a probate sale, perhaps the most important step is to ensure that you’re not doing it alone. Seeking professional help through the medium of a real estate professional is an investment that pays dividends through the entire process.
Appointment of an Administrator or Executor
If someone has been appointed in a will by the decedent, and they are willing to act as the executor, then that person is appointed as such. If there is no appointed executor, then the closest relative will be appointed as an administrator either by the court or other relatives.
Sale of the Property
Appraise the property first. There are appraisers you can easily find by a quick search online, or if you have already selected a real estate agent they will most likely have a referral. The property must sell for at least 90% of the appraised value.
The home is listed for sale and marketed for exposure. Your agent will list the home on the multiple listing service so that it ends up on sites like Realtor.com and Zillow. Buying agents will know that the property is a probate sale.
A buyer must make an offer accompanied by a 10% deposit, which may be rejected by the sellers. The offer is subject to the court’s confirmation, and the seller is not committed to that buyer even though their offer was accepted. The estate representative, through their probate attorney, will then submit to the court to confirm the sale. If all parties agree, then a future date is set for the sale to be finalized in court.
When the property has an accepted offer, a Notice of Proposed Action is mailed to all heirs, simply stating the terms of the proposed sale. The heirs have 15 days to review the notice and pose any objections. If there are no objections, the sale may proceed without a court hearing.
The Overbidding Process
Before approving the original buyer offer, the judge will ask if there is anyone in the courtroom who would like to bid on the property. The next bid must be 5 percent plus $500 above the original buyer offer. The judge will also accept additional bids in much the same manner as an auction until the highest bid available has been made at the confirmation hearing.
If a new buyer wins, then the 10% will be refunded to the original buyer.
Upon accepting an overbid, the buyer must give a 10% deposit in the form of a cashier’s check. That check is given to the Executor at the hearing by the winning bidder. A contract is then signed. This contract can have no contingencies and escrow usually closes within 15 days after the hearing.