Setting the Price for Real Estate During a Probate Administration
One duty of a personal representative of an estate is to manage and distribute the estate’s assets, in other words, carry out probate administration. In some cases, this may include selling real estate in order to distribute the proceeds to any beneficiary or to pay debts or expenses of the estate. The personal representative must carefully follow the rules and procedures outlined under California law and by the probate courts during the sale process. This includes the selection of the sale price and sale terms for the property.
Determining Sales Price and Terms for Real Estate During Probate Administration
As a personal representative of an estate selling real estate, it is important to keep in mind the following:
- When a property is sold privately, it is to be sold for at least 90 percent of its appraised value.
- The appraised value must be obtained within one year prior to the property being sold.
- All of the terms of the private sale of the real estate are generally subject to probate court approval. This includes the minimum required deposit.
- The local rules of the court overseeing the sale may vary between counties.
- Courts often will not approve any contingencies with an offer. Examples of contingencies include financing, inspection, or sale of a buyer’s other home.
- Notwithstanding the foregoing, personal representatives selling real estate with full authority under the Independent Administration of Estates Act will not face the same restrictions, and may agree to sales containing contingencies. There are instances where the property is able to be sold in the same manner any non-probate sale of real estate would be sold.
Clearly, the Independent Administration of Estates Act plays an important role for personal representatives seeking to sell real estate. Our article, “San Diego Probate Attorneys Explain the IAEA and Probate Real Estate,” offers helpful information about this process.
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