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A probate sale can seem like an intimidating process. It’s certainly not a simple process and one that can cause strain on a family, but with knowledge it can go a lot easier.
Real estate is sold in probate court when the owner of a property passes away. If there is no appointed heir when the owner passes, the property is turned over to the courts and then appointed to the closest relative as the executor to sell the property.
After all the steps for selling have been taken (which we’ll explain more), the probate court will handle proceeds being split between beneficiaries.
The short answer to, “How to sell during probate,” is to hire a top notch, experienced local real estate professional. Alex P. Williams in Pinellas County says “only about 2% of the Real Estate Agents in Pinellas County fit this criteria”.
Hire an agent with experience, and the process will be far easier for you. To make things even easier to understand, here is a basic explanation of how the probate sale process works. Keep in mind that some states are much simpler, and some more complicated in their probate regulations.
If someone has been appointed in a will by the decedent, and they are willing to act as the executor, then that person is appointed as such. If there is no appointed executor, then the closest relative will be appointed as an administrator either by the court or other relatives.
Appraise the property first. TalkToAl.com is one of these appraisers that will do a free Custom Market Analysis for you at no cost. If you have already selected a real estate agent they will most likely have a referral. The property must sell for at least 90% of the appraised value.
The home is listed for sale and marketed for exposure. Your agent will list the home on the multiple listing service so that it ends up on sites like Realtor.com and Zillow. Buying agents will show and sell the property.
A buyer must make an offer accompanied by a deposit, which may be rejected by the sellers. The offer is subject to the sellers confirmation, and the seller is not committed to that buyer even though their offer was accepted. The estate representative, through their probate attorney, will then submit to the court to confirm the sale. If all parties agree, then a future date is set for the sale to be finalized.
When the property has an accepted offer, a Notice of Proposed Action is mailed to all heirs, simply stating the terms of the proposed sale. The heirs have 15 days to review the notice and pose any objections. If there are no objections, the sale may proceed without a court hearing.
Before approving the original buyer offer, the judge will ask if there is anyone in the courtroom who would like to bid on the property. The next bid must be 5 percent plus $500 above the original buyer offer. The judge will also accept additional bids in much the same manner as an auction until the highest bid available has been made at the confirmation hearing.
If a new buyer wins, then the 10% will be refunded to the original buyer.
Upon accepting an overbid, the buyer must give a 10% deposit in the form of a cashier’s check. That check is given to the Executor at the hearing by the winning bidder. A contract is then signed. This contract can have no contingencies and escrow usually closes within 15 days after the hearing.