How to Sell A Property in Probate

Trying to sell a property in probate can be intimidating. Of course, it can be a complicated process that most people are not used to handling and can be stressful. However, if you know what to expect and understand some guidelines it will definitely be easier to manage both mentally and literally.   When a property owner dies, his or her properties are sold in probate court. If by the time that the owner passes away there is no heir appointed, the property is handed over to the courts who then designate an executor to sell the property. The executor would be the closest relative.   Once the selling process is completed the probate court will dictate how the proceeds are divided among the beneficiaries. Here is a basic overview of how the process works for a probate sale. Keep in mind that some states have different probate regulations, therefore it can be simpler in some states and more complex in others.

Assign an Executor or Administrator

If someone has been named in a will by the deceased and are able and agreeable be the administrator or executor, then they will be appointed as such. Conversely, if there is no assigned executor, the closest relative will become the administrator by court designation or other relatives.

Property Sale

The first thing is that the property must be appraised. You can find appraisers online or get a referral from a real estate professional or probate attorney. Any sale must be for no less than 90% of the appraised value. Additionally, offer from a potential buyer requires a 10% deposit, and the seller has the right to refuse any offer made.The offer has to be confirmed by the court, and the seller is not bound to that buyer despite their offer being accepted by the court. The probate lawyer for the representative of the estate will submit the sale to the court to make the sale effective.   If there are no issues between parties, a date will be set for the sale to be confirmed in court. Once the offer has been accepted, a Notice of Proposed Action will be sent to all heirs, indicating the terms of the potential sale.   A period of 15 days will be given to the heirs to see the terms and review the notice and raise any objections. If there are no oppositions, the sale will be carried out without court hearing.

The Over Bidding Process

The judge cannot approve the original buyer’s offer until asking if anyone in the courtroom wants to bid on said property. At the confirmation hearing, similar to an auction house, the judge will accept additional bids until the highest bid has been made at the confirmation hearing. Any bid is required to be 5% higher plus $500 over the original one. In the case of a new buyer with a higher accepted bid, original buyer will be refunded the 10% deposit they placed.   If the overbid is accepted, the highest bidder must make a 10% deposit for the property value as a cashier’s check. The new buyer will then provide the check to the executor at the hearing. And the contract is then finalized and signed. This contract can not be modified and the deposit will usually transfer within 15 days after hearing.