People are often pleasantly surprised to learn that the answer to this question (Can I sell a house during a California probate) is an affirmative, YES! That is correct, without hesitation, and that is without any doubt.
Y – E – S !
You can sell a house during a probate in California. However, there are timelines to be aware of and procedures to follow. Let’s talk about some of them here….
First of all you can not take any action, including selling of real estate, until you have authority from the California probate court. This means the Judge has to decree a court order and the Clerk has to issue Letters of Administration or Letters Testamentary. That “letters” document is what puts you in the decedent’s shoes to transact business.
Second is filing correctly in Court. It is very important that you try to get “full” authority under the California Independent Administration of Estates Act (IAEA). Full IAEA will allow you to sell without formal court confirmation as long as nobody objects to the sale. Going through a court confirmation process can cause some buyers to go look for a different house to buy so we like to avoid that process when we can.
Third is to hire a great California Realtor. I encourage people to work with experienced Realtors who want to work hard for you. Like any profession there are lazy Realtors who want to throw a listing up on the MLS and do little else. On the other hand there are some amazing hard-working Realtors who will go above and beyond to earn their commission. I help my clients find those superstars!
Fourth is to get the house ready for sale just like any other sale. Clean out the garbage, paint a wall, put some flowers in the front yard, etc…. Be aware that there may be heirs or beneficiaries who have an interest in what you clean out so do not throw anything away or give to a thrift store without talking to those interested people.
Fifth is finding a buyer and making sure to use the Probate Purchase Agreement (Form-PPA). This forms has the required language that differentiate a probate sale from a regular sale. For example, it says that Court confirmation MAY be required. That is, if somebody objects to the Notice of Proposed Action your attorney will send out. Make sure your Realtor asks for offers to be submitted on Form-PPA.
Sixth is to discuss the offers you receive with your Realtor and talk to your probate attorney too if you wish. Though I am not a real estate expert I have supervised hundreds and hundreds of real estate sales during probate so am happy to give my two-cents to help you select the best offer, counter offer as needed, and get into contract with the right buyer! Your probate attorney will then send the Notice of Proposed Action (NPA) to all interested parties and communicate with the title company to get them the information they need.
Seventh is to talk to your Realtor about what disclosures are required. The disclosures are more limited in a probate sale than a regular sale so talk to your Realtor about those forms. Of course any actual known problems must be disclosed.
Eighth is to close escrow and put the money into the estate bank account. Remember if there is over $250,000 at one bank it’s a good idea to move some of the money to another bank so that all the money is covered by FDIC insurance. The current FDIC insurance limits are $250,000 per bank. While I acknowledge bank failure is not likely you need to remember that you have a fiduciary duty to protect that money!
This is just an overview of the real estate sales process in a California probate and certainly you should talk to an experienced California probate attorney about your case to make sure you follow all the rules correctly in your case!