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Frequently Asked Questions
Q. Are there any restrictions on the sales price of estate real property?
A. Yes. The sales price of a private sale of estate real property subject to court confirmation must be at least 90 percent of its appraised value set within one year prior to the sale (Cal. Prob. Code § 10309). All terms of a sale, including the minimum required deposit, are generally subject to court approval and local rules of court which vary from county to county. Generally, offers with contingencies of any sort (e.g., financing, sale of home) are not approved by the court. Sales of real property by the personal representative with full authority under the IAEA do not have the same restrictions and may contain all of the same contingencies and provisions as non-probate sales of real property (Cal. Prob. Code § 10503).
Q. Are prospective purchasers required to submit a deposit of 10% of the purchase price when submitting a purchase offer on a probate property or at the confirmation hearing?
A. California law does not require a 10% deposit. Some personal representatives may request such a deposit which reflects the preference of those persons and the traditional practice in many areas. When listing a property an agent may wish to discuss with the personal representative the pros and cons of asking for a lower deposit amount which could possibly result in more and/or higher offers.
Q. What is meant by court confirmation of the sale of real property?
A. The personal representative is required to report the sale and petition the court for confirmation of the sale within 30 days of accepting an offer (Cal. Prob. Code § 10308). Should the personal representative fail to perform these acts in this time period, the purchaser may do so on his or her own behalf (Cal. Prob. Code § 10308(b)). All estate real property sales must be confirmed by the court except for sales of property by a personal representative with full authority under the IAEA.
At the confirmation hearing, the original sale may be subject to being overbid by another purchaser (Cal. Prob. Code § 10313). The court will confirm the sale to either the original bidder or to an overbidder and normally approve payment of the brokerage commissions. Title will pass to the successful buyer only after the terms of sale have been met, the court has confirmed the sale and the personal representative has executed a conveyance to that buyer (Cal. Prob. Code § 10314).