The Nuts & Bolts of Probate for a REALTOR®
Probate deals where I was both the Personal Representative and Listing Agent. Paul does a great job in educating Realtors on Probate Real Estate Transactions and is certainly a good referral for clients. Here is a sample of what you can learn at one of our Paul Horn’s Probate for Realtors workshops:
What is Probate?
The California probate process is nothing more than a title clearing procedure. The court appoints a person to be in charge of the estate, known as the personal representative. It is the personal representative who signs your listing agreement.
Who can be the Personal Representative?
If there is a will naming someone as the personal representative, that person will be appointed as the estate Executor. If there is no will, then the priority of who can serve as the estate Administrator is as follows: surviving spouse, children, parents, siblings, then any other relative. A personal representative can have either full or limited authority. Full authority means that the representative can sell the house without court confirmation; limited authority means that the sale must go through the court confirmation process.
First Step: Is Probate Necessary?
The first thing REALTORS should do when a homeowner has died is to get a copy of the most current grant deed. If the person on the title has passed–welcome to probate. If the property is titled to a trust, then you will not need probate. Just get a copy of the trust and the person who is named as the successor trustee is the person who signs your listing agreement. If the deceased person has left a will, you will still need probate. In Latin, “Probate” means “to prove a will”.
What is a Probate Appraisal?
Probate cases require a valuation of the real property by a court-appointed appraiser called the probate referee. The probate referee only does a quick drive-by of the property and pulls comparables from the date of death to value the property. As a rule of thumb, if you are aware any major damages to the property, take photos of the damages to give to the probate referee so the property could be valued accordingly.
Closing a Probate Sale: Full Authority
If your personal representative has full authority, then there are three documents you will need to close your probate sale: 1) the Original Certified copy of the Letters; 2) the Order for Probate and 3) the Notice of Proposed Action. Without these documents, you will not be able to close escrow.
Closing a Probate Sale: Limited Authority
If your personal representative has limited authority, your personal representative must first publish the intent to sell the real property in a local newspaper. If there is an accepted offer, the purchase price must be within 90% of the appraised value given by the probate referee. Once accepted, the sale must be confirmed by the court. At the hearing, the sale is subject to overbidding by others.
Taunee English, Chair of Professional Development Committee, Probate & Trust Broker, Lions Realty Group