San Diego Probate House Sale and the Independent Administration of Estates Act (IAEA)
Much of the time selling a piece of San Diego real estate in probate is similar to the traditional way of selling a San Diego house by the San Diego Executor or San Diego Administrator. The California Association of Realtors have specific purchase agreement and corresponding documentation that will better protect the legal and financial rights of the San Diego Administrator, Executor and also the estate.
The San Diego probate house frequently is sold without interference by the San Diego Probate Court. The Independent Administration of Estates Act (IAEA) authorizes the San Diego probate sale. The personal representative could be named in the will and would be referred to as the Executor or when no will is present, the San Diego Probate Court will appoint an estate representative and this person would be referred to as the Administrator.
Occasionally an “interested party to the estate” will file an objection to the sale under the IAEA; if this occurs, the San Diego Executor, Administrator or the San Diego Probate Court can decide the property should be sold with a court confirmation hearing.
This is how the procedure works for the sale of San Diego real estate with a San Diego Probate Court confirmation hearing as required by California Probate Law:
- A probate referee appraises the property.
- The San Diego Administrator or Executor hires a qualified real estate professional. The real estate agent should have experience with selling San Diego probate property.
- The San Diego probate real estate agent will assist with the negotiation of a purchase agreement that will benefit the San Diego probate. The purchase price must at least 90% of the probate referee appraisal. This purchase agreement is not binding on the estate.
- Once the San Diego buyer removes all contingencies (such as an inspection, appraisal, loan approval, etc.), the San Diego Probate Attorney files a petition for a confirmation hearing. The hearing can be up to 45 days after the petition has been filed with the San Diego Probate Court.
- The buyer must deposit 10% of the property’s purchase price as earnest money before the court confirmation hearing is held.
- The sale details including the agreed upon purchase price is advertised in a local paper for the time and the way specified by law.
Court Confirmation Hearing
- When the hearing is held, anyone can bid on the property. The first overbid must be at least 5% above the accepted purchase price, plus $500. Overbids cannot have any conditions at all – no inspections, no financing, no appraisal, etc. The San Diego Probate Court will make a ruling on how much higher the next overbid must be – sometimes $1,000 higher or more. The bidding ends with the final bid.
- A confirmed overbidder must pay a cashier’s check deposit for 10% of the confirmed purchase price; if the overbidder then defaults, he loses his deposit.
- In the case of a confirmed overbidder, the original buyer gets his deposit refunded. Otherwise, the sale to the original buyer proceeds and the original buyer must arrange for payment of the remaining 90% sales price.
The San Diego court confirmation procedure is time-consuming. The process itself limits the San Diego buyers to those that are willing to risk losing the property to an overbidder at the San Diego probate court confirmation hearing.
If you or someone you know need help with real estate in a San Diego probate and want to talk about your exact circumstances, call me at 619-741-0111.
I’m Kim Ward, San Diego’s Probate Real Estate Consultant.