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By: Scott Grossman on October 15th, 2016

Sale of Estate Real Estate Goes to Highest Bidder

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Under the terms of the Independent Administration of Estates Act, a personal representative may sell real estate belonging to an estate with varying amounts of court involvement. If a prospective purchaser makes an overbid but an initial offer has already been received, the courts are required to intervene. When this happens, the court may in certain circumstances direct the personal representative to accept the higher amount.

Questions the Court Will Consider Regarding Overbids

At the confirmation hearing, the court will determine whether or not to accept a bid that exceeds the initial offer for the purchase of the real estate. The court will address the following questions when making this determination:

  1. Is the sale conducted by the personal representative under the full authority of the IAEA? If so, the original bid is not subject to an overbid at the confirmation hearing.
  2. Is the overbid in writing?
  3. Is the other prospective purchaser present at the confirmation hearing?
  4. Does the overbid meet the minimum amount required for an initial overbid?
  5. If there is already an initial overbid, do the subsequent overbids meet the minimum amounts required by the court, as determined at the confirmation hearing?
  6. The highest bid is based on credit but there is a lower bid that is cash. Has the personal representative informed the court in person that the higher offer is acceptable?
  7. If this hasn’t happened, has the approval been conveyed by the personal representative’s attorney prior to confirmation of the sale?

Depending on the answers to the questions above, the court may intervene to dictate that the sale of the estate real estate go the purchaser making the overbid. Overbids are similar to real estate auctions in how they are handled. Bids are accepted until the highest offer is heard.

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