The probate process can involve some more complicated, and yet doable, tasks. On the list of this matters that do require a bit more effort is the sale of a home during the probate process. Indeed, while more complicated than some other elements of probate, selling a home is also one of the more common tasks involved probating an estate. Understanding the essential elements of selling a home in probate helps to make the process more manageable
File Petition With Local Probate Court
The basic elements of the probate process need to be satisfied and in place before a home is sold. The first element of that process is filing a petition for probate. This filing is made with the local probate court located in the county where the deceased person passed on.
If there is a will, the original of that instrument is filed with the court as well. The probate court is asked to approve the person nominated to serve as the executor in the will. The executor is the person who oversees the probate of the estate, including the sale of the home. If the deceased individual didn’t have a will, a petition is filed with the court. The court is asked to name an administrator who oversees the affairs of the estate in probate, including the sale of the home.
Prepare Inventory of Estate
Once the probate case is opened by the court, the executor or administrator is charged with preparing an inventory of the estate. This involves making a comprehensive list of the assets of the estate and providing an accurate estimate of value.
Obtain an Appraisal of the Residence
Whilst the inventory process is underway, an appraisal of the home is apt to be necessary. Indeed, the only reason an appraisal would not be necessary if a residence is to be sold during the probate process is if one was undertaken in a time period directly before the commencement of probating the estate.
Determine Type of Sale for Home
The next step in selling a home in probate is to determine what type of sales process will be utilized. Homes in probate can be placed on the open market for sale. In addition, they can also be put up for auction. No matter the option selected, an executor or administrator has the duty to get the best possible sales price on real estate. This obligation is part of what legally is known as an executor or administrator’s fiduciary duty to an estate.
Set Base Sales Price and Obtain Court Approval
Before the residence is put on the market for sale or up for auction, a determination must be made as to the lowest price for sale that will be accepted (known as the “reserve price” in an auction). The probate court needs to approve the base price for sale of the real estate.
If for some reason no offer comes in above the base price on the open market, or if no bid comes in above the reserve price at an auction, an executor or administrator needs to return to the probate court to obtain permission to sell a home below the previously established base price.
Obtain Court Approval of Sales Contract
When a contract for sale is in place, the document is presented to the court for approval. What in California technically is called a petition to approve real estate sale is filed with the local probate court. Provided the sales price meets the initial, or amended, requirements of the probate court, the judge is likely to approve the sale. The proceeds from the sale are paid to the estate. They funds will then be distributed to heirs in the manner set forth in the last will and testament or as set forth in California probate law (if there is no will).
Closing on Sale
Once the probate court approves the real estate sale contract, the matter can proceed to a closing like in any other realty sales transaction. The executor or administrator is the person with the legal authority to sign the deed conveying ownership of the home to the purchaser. Beyond that, there really is no difference between a “regular” closing and one involving real estate in probate.
File Final Report with Court
When the affairs of the estate have been fully tended to as part of the probate process, the preparation of a final report to the court is the final order of business. The final report will include essential information about the sale of the home.
The final report is filed with the probate court together with a petition to approve it and conclude the case. Unless the court has some question or issue with something that occurred during the probate process, the court is likely to approve the final report.