When a homeowner dies intestate (without a will), it can trigger a lengthy legal process called probate. During this legal process, a court sorts through a deceased person’s property and determines which assets belong to whom. And if you’re on the buying or selling end of a probate home sale, it can be shocking to find out just how different the full process can be from a standard sale.
Simply put, if you’re trying to buy or sell a home, and the home’s owner died without a clear trust, you may need to start looking for a probate real estate agent to help you through the process. Here we’ll explain how probate home sales work, as well as the actions you can take if you need to start a probate sale.
Note: A Realtor® is not exactly the same thing as a real estate agent, though they’re similar and many people use the terms interchangeably in everyday life. Realtors® are typically licensed real estate agents and professionals who are official members of the National Association of Realtors® that subscribe to the Code of Ethics & Standards of Practice, designed to ensure that real estate professionals serve the best interests of their clients.
Traditional home sales vs. probate home sales
There are major differences between standard home sales and probate home sales. According to Rick Ruiz, a top Las Vegas real estate agent who has probate expertise and 20 years of experience, the differences between standard home sales and probate sales boil down to two key things:
- The time the process takes
- The uncertainty both buyers and sellers may feel as the process drags on
“The purchase or the sale has to be ratified by the court because when somebody doesn’t die with a clear will, trust, title, et cetera, the court serves as the fiduciary for the state and has to ensure that the estate does get the maximum possible price and proceeds for the sale,” explains Ruiz.
Standard home sales tend to happen faster than probate sales. That’s because with traditional sales you act in your own interests, whatever that means to you. You can set your own timeline for the home sale, for example, and you’re free to list your property at any time and at any price.
With traditional sales, it often takes around three weeks to get an offer for your home — and you are free to choose whether or not to accept the offer. Once accepted, you’ll likely have a 30-60 day escrow period, and once all the final contracts are signed, you can sell the home without any need for court supervision.
Alternatively, when you’re the executor or personal representative selling a home during probate, you act in the interest of the decedent’s estate. This means you need to follow state probate laws and any potential directives from the probate court judge when setting the price and, in some cases, the timeline.
Due to these regulations, probate property sales can be significantly different from a traditional home sale. “It takes the seller longer to dispose of the asset because of the need to hire a probate attorney, do the discovery process, and get the administrator appointed,” explains Ruiz.
The probate real estate sale process
For a real estate sale, the probate process can differ depending on whether the probate court granted you rights of independent administration or dependent administration. Here’s a brief look at how each process works:
The independent administration rights probate process
If you, as the executor, have been granted independent administration rights, the probate property sale proceeds in a similar way to a traditional property sale. You have the freedom to set the list price, list the property on your timeline, and accept an offer without interference from the probate court.
However, there still are probate-specific details that your agent needs to stay on top of, including:
- Setting up the proper probate contracts
- Listing the home as a probate property
- Making disclosures specific to probate
If these details aren’t in order at your final probate hearing, the probate court judge likely won’t allow the estate to be closed. As a result, you may need to redo the paperwork and schedule a new hearing, causing the lengthy probate process — which sometimes takes a year or more — to drag on even longer.
The dependent administration rights probate process
If you’ve been granted dependent administration rights, the probate property sale may be lengthier and more complicated. In these cases, the probate court oversees the home sale through an additional hearing called the court confirmation hearing.
Before this hearing, the executor hires a probate real estate agent to list the house at a price that can’t be less than 90% of its fair market value, according to Stimmel Law. Once you receive and accept an offer, it must then be presented to the probate court for confirmation.
California and the Overbid Process
In many states, the probate judge does not automatically confirm the accepted offer at the confirmation hearing. Instead, the court may entertain higher offers from other buyers attending the hearing. Known as the overbid process in California, this procedure functions much like an auction, with the court accepting the best offer price before it confirms the sale.
Fortunately, many states have taken steps to streamline the probate process and to avoid complicated steps like the court confirmation hearing.
So far, 18 states have adopted the American Bar Association-approved Uniform Probate Code to simplify probate proceedings. Other states have streamlined the probate process on their own, including in California where they’ve enacted the Independent Administration of Estates Act (IAEA).
How to avoid probate for your heirs
Unfortunately, there aren’t ways to avoid the probate process once it has started. However, you can help your heirs bypass the probate process prior to your death. The easiest way to keep your heirs out of the courtroom is to set up a clear trust and will that spells out exactly who should receive ownership of a property when you die.
“A properly written trust will avoid a probate and is absolutely, positively, very important to be done,” emphasizes Ruiz.
Will selling as-is for cash speed up probate?
You may think you can avoid the probate process by selling your home for cash, as-is. However, according to Ruiz, selling for cash probably won’t end up expediting the process much.
“At the end of the day, you can only go as fast as the courts can go,” he explains. “So once it does get ratified, you can go ahead and close right away, but regardless, even if it’s a financed offer, the runway leading up to the court date is long enough usually that the buyer has the financing secured by the time that comes. So it really doesn’t speed things up much at all.”
There’s different rhetoric that has to be put into the marketing and there has to be realistic expectations for potential buyers. If it’s not properly negotiated and not properly structured, you’re going to enter into a contract with somebody who’s not in it for the long haul and might walk on you halfway through the process, and that can delay the process even further.
- Rick Ruiz Real Estate AgentCloseRick Ruiz Real Estate Agent at GK Properties
- Years of Experience 20
- Transactions 1189
- Average Price Point $240k
- Single Family Homes 988
Finding an agent or probate Realtor® with experience
If you think you’ll end up caught in a probate sale, it’s best to track down a probate real estate agent or Realtor® who understands the full probate home sale process. As Ruiz explains, opting out of a probate Realtor® can end up costing you time and money.
“There’s different rhetoric that has to be put into the marketing and there has to be realistic expectations for potential buyers,” he says. “If it’s not properly negotiated and not properly structured, you’re going to enter into a contract with somebody who’s not in it for the long haul and might walk on you halfway through the process, and that can delay the process even further.”
Here are a few ways to avoid delays and problems during a probate home sale:
Identify a Certified Probate Real Estate Specialists (CPRES)
Real estate agents who are designated Certified Probate Real Estate Specialists (CPRES) have been trained by the U.S. Probate Services. In order to receive this certification, an agent must pass a test that measures their ability to handle complex probate property sales procedures. Finding an agent with this certification is an easy way to make sure you’ll be working with someone who understands the probate system.
Use HomeLight’s Agent Match
Not all experienced probate real estate agents have CPRES certification, which is totally fine. Non-certified agents may have received their probate training through past experiences handling probate property sales, by attending seminars, or through studying state government training materials.
An easy way to track down a top real estate agent with probate experience is to use HomeLight’s Agent Match tool. This platform will locate and connect you with the top agents within your area that have probate experience.
Hire a probate attorney
Even if you are named the executor of the estate in the decedent’s will, you have no legal authority to transact any estate business until you have been officially appointed as the estate’s personal representative at your first probate hearing.
Since you can’t list the house — or even sign a listing agreement — with your probate agent until you have authorization from the probate court, it’s important to hire an attorney to navigate the probate process.
However, hiring a probate attorney doesn’t mean you should forego hiring an experienced probate real estate agent. While waiting for the court authorization, an agent can help prep the home for sale, determine the home’s value, and connect with cleaning services, contractors, and other vendors.
Preparation can simplify your probate sale
If you’re facing a probate home sale, there are preparations you can make to smooth out the process. By leaning on the help of both a probate attorney and an experienced probate real estate agent or probate Realtor®, you’ll be set up for a successful probate home sale.
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