What is a trust?
A trust is a legal arrangement in which one person or entity holds the title to a property for the benefit of another person or entity.

What is probate?
Probate is the court-supervised process for administering a decedent’s estate. It involves proving the validity of the will (if one exists), appointing a personal representative, identifying the decedent’s assets subject to probate, settling any outstanding debts, and distributing the remaining assets to beneficiaries. In some cases, the estate may include real property that needs to be sold under court supervision.

Why do some probate properties not require court confirmation?
Certain probate properties, such as Trust Sales, may not require court confirmation if the Executor or Administrator has been granted “full independent powers” under the Independent Administration of Estates Act (IAEA). In such cases, the Administrator can list the property for sale. Once an offer is accepted, the estate’s attorney sends out a Notice of Proposed Action detailing the sale terms to all heirs. If there are no objections within 15 days, the sale proceeds without a court hearing. Regardless, it’s strongly recommended that sellers work with a professional probate attorney to safeguard the estate’s interests.

What is a Property Profile?
A Property Profile is a comprehensive report detailing specific information about a property. It includes data such as square footage, the number of bedrooms and bathrooms, lot size, zoning, use code, tax information, and ownership history. Additionally, it features recorded documents like grant deeds, quitclaim deeds, and deeds of trust, as well as sales comparables and neighborhood information. A current Property Profile is essential for accurately pricing the property and identifying potential issues that may affect the sale.

Should I make repairs before listing a probate property for sale?
No, in California, probate properties are sold “as-is.” Making repairs can inadvertently conceal issues with the property, and even minor changes, like a new coat of paint, can mask defects. Aside from clearing out personal belongings and tidying the yard, it’s best to leave the property in its current condition, allowing buyers to conduct their own inspections.

What do I need to do to prepare the property for sale?
Your agent can recommend qualified specialists to help prepare the property for sale, including professionals for removing belongings and cleaning. Your agent will also assist in conducting an inventory of the property and preparing a comprehensive Property Profile.

How can I choose the best list price?
Your agent should provide a detailed Market Value Analysis, which includes the selling prices of comparable properties in the area. This analysis will cover recent sales data, such as price per square foot and days on the market. By considering this information alongside market trends, your agent can help you determine an appropriate listing price that attracts qualified buyers.

Once a property is listed, how will it be marketed?
Your agent should implement various strategies to market your property effectively. These strategies may include signage, newspaper and internet advertising, direct mail, open houses, and personal networking among successful agents. Your agent will handle showings, answer inquiries, and continue promoting the property to secure the best offers. They should also engage with neighbors to keep them informed about the property details and price. Be sure to ask your agent for a written marketing plan and explanations of how different marketing approaches will benefit the sale.

Do I have to pay up front for all these marketing and advertising costs?
No, you should not incur any up-front fees for advertising or marketing.

Is the paperwork different in a probate sale than in a traditional real estate transaction?
Yes, the paperwork for probate sales differs from traditional transactions. In typical sales, sellers disclose information about the property’s condition, including defects or issues. However, sellers in probate or trust situations often have not lived in the property being sold, so special disclosure forms are necessary. Probate and trust sales require standardized disclosures, listing agreements, and purchase contracts. In California, the California Association of Realtors provides standardized forms specifically for probate transactions.

How do you determine the minimum bid in court at the confirmation hearing?
The minimum first overbid price is dictated by the Probate Code. The calculation assumes there is an accepted offer on the property. The minimum overbid is 10% of the first $10,000, plus 5% of the remaining accepted offer amount. The overbid must be presented in person via a cashier’s check (personal checks are not accepted). If the property is in high demand, multiple overbidders may participate, making higher bids more advantageous.

Example:
A property listed at $200,000 has an accepted offer of $175,000.

• Minimum overbid calculation:
  • Accepted offer = $175,000
    • 10% of $10,000 = $1,000
    • 5% of $165,000 = $8,250
  • Minimum overbid = $184,250
  • Total amount of cashier’s check = $18,425

Should I use the same agent who helped me sell my own house?
While you can choose any real estate agent, it’s essential to remember that probate real estate transactions are complex legal matters. Many agents may lack experience with the probate process. It’s advisable to select an agent who specializes in probate and trust real estate and understands the nuances of pricing, marketing, and presenting these properties effectively. Your agent will advocate for your interests throughout the transaction, so their understanding of the process is crucial.