How to Buy and Sell Probate Real Estate in California
When a property owner dies, what happens to their property? In most cases, their estate must go through probate before the property can be transferred to any heirs. This leaves many surviving relatives wondering how to probate real estate in California. So, let’s dive in to How to Buy and Sell Probate Real Estate in California.
Real estate subject to probate must go through the probate process before it can be transferred. Even to the intended beneficiaries and relevant closest living relatives. The probate process can be lengthy and expensive, so it’s important to understand what it is and how it works before you inherit any probate real estate.
Additionally, if you are an heir to a property in probate, you may wish to sell or buy property from the estate. If you are interested in purchasing or selling during the probate real estate process, there are a few things you should know.
In this article, we review how to probate real estate in California for informational purposes and can help you decide if you need a probate attorney’s help. We also discuss the basics of probate real estate in California, including how to find properties, the bidding process, and what to expect after the sale.
What Is Probate for Real Estate?
Property belonging to a deceased individual, in most cases, must go through a procedure known as probate. Probate is the legal process of turning over a deceased person’s assets to pay off any debts and proceed to heirs and beneficiaries.
An estate fund can include all kinds of property, from bank accounts and retirement accounts to furniture and personal knickknacks. However, it also includes any real property (aka real estate) that is owned by the deceased person at their time of death. Such real property might include a family home, vacation property, or rental property/investment property.
The entire probate process usually takes between 9 and 12 months, although this can vary depending on the types of estates. After probate court proceedings and a confirmation hearing, the judge makes a ruling on the final distribution of assets. It can take longer if the estate is complex or if there are disagreements among the heirs.
What Is the Process to Probate Real Estate in California?
The probate process generally follows the same steps. Check out this article about how to file probate for details. Here’s the process in a nutshell: you file a petition for probate, the will (if there is one), and a death certificate with your local court. Once the petition is filed, the court appoints an executor or personal representative to handle the estate. The estate representative gives legal notice to all interested parties, including creditors, and then begins the process of collecting and distributing the assets of the estate.1
If you find yourself in the position of having to Probate an estate, the best thing you can do is consult a legal document preparer like CA Legal Docs, to ensure the entire probate process goes as smoothly as possible.
How Can I Avoid the Probate Real Estate Process?
You may want to avoid sending property through probate due to appraisal fees and the lengthy process associated with the probate administration. To avoid probate after death, however, your loved one will have had to do some estate planning during their lifetime.
If you want your heirs and beneficiaries to skip over the legal duty of probate real estate selling and skip straight to ownership or a non-probate sale, you have a few options:
Transfer the personal property to a revocable living trust while you’re alive. A living trust is a legal entity that can hold property on behalf of its beneficiaries. You can also specify the distribution of property to a living trust document after your death.
Put your real estate in Payable on Death accounts (PODs) or joint tenancy assets. These assets cannot go through probate.
You can also transfer your assets as a lifetime gift. This is also known as a vivos gift to avoid probating property on death.
Without this kind of careful transfer of title or trust administration work prior to death, your heirs will need to go through probate sale to sell the property.
Buying and Selling Probate Real Estate in California
When you lose a loved one, one of the things you may have to do is deal with their real estate. This can include selling their property. Often done through a public auction, private sale, or private auction (usually conducted by an auction company). Probate property sales may be difficult compared to traditional sales. So, check out this section to familiarize yourself with how this works.
How to Buy and Sell Probate Real Estate in California – Finding a California Probate Real Estate Agent
Just like with any regular sale of property, you may need a probate real estate agent or probate broker to help you through the real estate process. As part of the probate real estate process, your real estate specialist needs to carry out a diligent property inspection of the real estate and have the findings written on an agent visual inspection disclosure form. The right agent will also help you through the entire real estate transaction of selling the estate property and be a valuable resource when it comes to dealing with the probate hearing in court.
If you’re looking for a probate real estate agent, the first step is to contact the executor of the actual estate if that person is a professional executor of some kind. Let them know that you’re interested in selling the property, and they will then provide you with a list of potential probate agents for your simple estate planning and selling.
Once you have a list of agents, you’ll need to do your research. Find the one that’s right for you. Real property owners of any kind are no doubt familiar with this process. This involves looking at reviews, interviewing agents, and asking for references.
Selling Probate Real Estate Property in California: Pricing
Probate assets (real estate) can be worth a lot of money. However, if your sale price is too high, you could end up sitting on the property for a long time. Sadly, without getting any offers from original buyers.
To avoid an inappropriate price, the list price is determined by the listing agent. Combined with an appraisal for the court itself. When it comes to pricing your probate estate property (creating your probate price), there are a few things your real estate agent and the court need to take into account.
- The value of the property itself. This can be tricky to determine. It’s often worth less than the market value. This could be due to condition. Especially in the case of an elderly relative who didn’t update the house for decades, for instance).
- Any outstanding debts or mortgages on the property.
- Any fees associated with the probate process.
Once you have all this information, you can start to get an idea of what your property is worth. This helps to know how to determine its list price accordingly. Note that real estate markets differ in California from county to county.
Buying Probate Real Estate Property in California
Probate real estate sales are often conducted as sealed bids; this means the heirs make their offers with a mandatory 10 percent deposit to the executor without being aware of what the other heirs have proposed. The executor then chooses the highest bidder.
Just like when selling property, it’s a good idea for real estate buyers to enlist the help of a real estate agent if they want to become the sole owner of probate property. The probate real estate selling process can be complex. There’s often a lot of room for negotiating the purchase price. If you’re not comfortable negotiating, your real estate agent can help here. With a little bit of patience and knowledge, you can successfully become the legal owner of your relative’s property, even if they didn’t leave it to you in their will.
What to Expect After the Sale of Probate Real Estate in California
It’s official: you’ve successfully sold or bought probate real estate in California! But what comes next? Here’s what you can expect in the days and weeks after the sale:
- Payment for the property is exchanged. How and when the seller receives money depends on the terms of the sale. Typically, the escrow company cuts a check within a few days of the sale.
- The new owner assumes their role. The escrow company will take care of this for you.
- The seller files a final accounting for the real property sale and pays the accounting fees to the court. This is required in most probate cases. Careful accounting must show how much money was raised from the sale of the property. As well as how it was spent during the probate procedure.
- The seller may need to pay taxes on the sale and report them on their personal income tax return. If the property was owned by a deceased person, there may be estate taxes due as well. The new owner may also be responsible for paying property taxes.
The sale of your probate real estate can be a lot on its own. It’s important to remember that it’s just one step in the probate process. With a little bit of planning and knowledge, you can make it through with ease.
How to Buy and Sell Probate Real Estate in California with CA Legal Docs in Walnut Creek, CA and CA Legal Docs in Napa, CA
Want to avoid hiring an estate lawyer as you navigate the formal probate process? You can save money by using a reasonably priced service that assists with creating legal documents rather than hiring an attorney and charging expensive attorney fees.
Although CA Legal Docs is unable to provide legal advice. We do offer excellent legal document preparation services for the entire process of probate at reasonable prices. We serve California counties, including Napa County, Solano County, Contra Costa County, and Alameda County, and much more. Contact us today to get started!
**This information should be considered GENERAL INFORMATION ONLY and is not a substitute for the advice of an attorney **
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