Limited Authority vs. Full Authority. The deciding factor on when you can list a Probate Property for sale.
Once the Judicial Branch of California Courts has granted the Order for Probate and the Letters, the Judicial Branch of California, the Administrator or Executor of the Estate, may sign the Residential Listing Agreement and the California Residential Purchase Agreement (RPA). The required Earnest Money Deposit (EMD) must be 3% of the purchase price for all Full Authority Probate Sales.
Once all parties sign the RPA, the Probate Attorney will need to draft the Notice of Proposed Action (NOPA). The NOPA contains all information about the sale of the Estates property, which includes the sales price, buyer’s name, and the RPA. The notice must be mailed to all
beneficiaries for their consent and objection to the sale. The beneficiaries have 15 days (from the date mailed) to provide their consent or objection. Should no one object, the transaction can close after the 15th day. Should there be an objection to the sale, the sale would be subject to court confirmation.
Limited Authority requires the Order for Probate, Letters, Notice of Publication, and the Probate Referees Value. The attorney will need to publish the Notice of Sale in a local newspaper during the probate process. The publication must run in the newspaper at least three times. Once the publication has run and the probate referees’ value is obtained, the personal representative may accept and offer. The property’s sales price must be within 90% of the probate referees’ value.
The required Earnest Money Deposit must be 10% of the purchase price, and the buyer must clear all contingencies. Once the buyer removes all the contingencies (except the Court Confirmation), the attorney will prepare the Report of Sale and Petition for Order Confirming the Sale of Real Property. The petition discloses the real estate agent commission percentage, sales price, subject property’s address, probate referees value, earnest money deposit, and the formula for the minimum overbid.
At the hearing, the court becomes a public auction (known as overbidders) for anyone interested in the decedent’s property. The overbidders must show proof of funds and have a cashier’s check for 10% of the minimum overbid. After the auction, the winning bidder must provide cashier checks payable to the estate directly to the attorney. Lastly, the attorney is to file the Order Confirming Sale of Real Property, which is to be signed by the judge.