What is Probate sale?

August 17, 2017 | Iulia Zecheru

What is Probate Sale?

When somebody dies intestate (no will) or without bequeathing their property, the state takes over and administers the sale of the property in probate court. Probate is the court administered process of gathering and distributing the deceased person’s estate to the heirs. The sale will be supervised by a probate attorney or the estate representative who will hire a real estate agent.

The probate process appears in 2 situations:

• If the deceased person had a will and the property is subject to probate, the probate process begins when the executor nominated in the will presents the will in court.
• If the deceased has no will, someone will request the court to be named the administrator of the deceased’s estate.

Basic steps to Probate:

1. As presented above, the probate process begins with the filing of a petition with the probate court to either present the will to probate and appoint an executor or to request the nomination of an administrator. Usually, a notice of the court hearing must be sent to all heirs, so they can have the opportunity to object.
2. Notice to creditors must be sent and an inventory of the assets must be completed. Any creditor that wants to make a claim on any assets must do so within a limited period of time. All expenses must be paid from the estate.
3. Legal title is transferred – after the waiting period is over, the estate representative will petition the court for the authority to transfer the remaining assets to beneficiaries as directed in the will or according to the state intestate succession laws.

When buying a property that will be sold in probate court, the buyer must be aware that the process will be longer and slightly different than a standard sale. When making an offer, the deposit should be at least 10% which is non-refundable (unless the buyer is not confirmed by the court, if needed). The offer will be accepted by the estate representative, but sometimes the sale will be subject to the court’s approval. If so, the probate attorney will petition the court to confirm the sale. Once the sale date is determined, the parties must wait a minimum of 30 to 45 days. For the sale to be approved, the buyer or any other interested parties need to be present in court where the property will be auctioned. If nobody shows up to bid on the house, the first buyer gets the property.

A very important difference than a standard sale is that, since the seller is deceased, disclosures or negative aspects that can affect the property’s value, will not be made. Because of that probate sales can be risky and an early inspection is highly recommended.

Buyers, Sellers