What is probate?
Probate is the court-supervised administration of a decedent’s estate. The probate proceeding involves “proving the will” (if there is a will), appointing the personal representative, determining the decedent’s assets that are subject to probate, paying outstanding debts and disbursing funds to the beneficiaries. In some cases, the decedent’s estate includes real property that must be sold under the court’s supervision.
What is a trust?
What’s the first thing I should do before listing the property?
Request a complete preliminary report from Nicholas Realty that shows the ownership of a specific parcel of land, together with the liens and encumbrances. At Nicholas Realty we supply our clients with this report for free.
Why do some probate properties not require court confirmation?
If a probate property is a Trust Sale or if the Executor/Administrator of the estate has been granted “full independent powers” under the Independent Administration of Estates Act (IAEA), the sale may not require court confirmation.
If the Administrator has full independent powers, he or she may elect to list the property for sale. Once an offer is accepted, the estate’s attorney mails out a Notice of Proposed Action stating the terms of the proposed sale to all the heirs. The heirs then have 15 days to object to the sale. If there is no objection within 15 days, the sale goes through without any court hearing required. (Regardless of the details of the probate transaction, sellers are strongly encouraged to work with a professional probate attorney to protect the estate’s best interests.)
What is a Property Profile?
A Property Profile is a report that provides details on a specific property. It contains information such as square footage, number of bedrooms and bathrooms, lot size, zoning information, use code, tax information, and ownership information. Additionally, the profile has the recorded documents, such as the grant deed, quitclaim deed, and copies of deeds of trust. The report can also contain sales comparables, school information, and neighborhood information. A complete, current property profile is essential for setting the price of the real property and for determining problems that may interfere with the sale.
Should I make repairs before listing a probate property for sale?
No. In California, probate properties are sold “as-is.” If you make repairs, you may inadvertently conceal something about the condition of the property. Even a coat of paint can unintentionally conceal a defect. Except for removing personal possessions, clearing out trash and cleaning up the entryway and yard, it is important to leave the property in its present state and let the buyers do their inspections and satisfy themselves as to the condition of the property.
What do I need to do to prepare the property for sale?
How can I choose the best list price?
Nicholas Realty should provide you with detailed market data, called a Market Value Analysis. This includes the selling prices of similar properties in the neighboring area. It will also include in depth information on recent sales in the area, such as price per square foot and the number of days the property was on the market. Taking into consideration the information in the analysis as well as other intangibles of the market, Nicholas Realty will be able to help you determine a listing price that is appropriate for the market and will attract the greatest number of qualified buyers.
Once a property is listed, how will it be marketed?
Do I have to pay upfront for all these marketing and advertising costs?
Is the paperwork different in a probate sale than a traditional real estate transaction?
How do you determine the minimum bid in court at the court confirmation hearing?
The minimum first overbid price is set by a statute in the Probate Code. Calculating the overbid assumes that there is an accepted offer on the property. The minimum overbid amount is 10% of the first $10,000 plus 5% of the balance of the accepted offer. The overbid must be presented in person by cashier’s check (no personal checks). If a property is highly desirable, there may be more than one overbidder. In that case, an overbid above the minimum would be to the advantage of the potential buyer. Here’s an example of how the overbid and deposit amount are determined:
EXAMPLE: A property is listed at $200,000. The accepted offer is $175,000.
The minimum overbid is calculated as follows:
Accepted offer = $175,000
+.10 x $10,000 = $1,000
+ .05 x $165,000 = $8,250
___________________________________________
Minimum overbid = $184,250
x .10 = $18,425 amount of cashier’s check
Should I use the same agent who helped me sell my own house?
How Long Does Probate Take?
The length of probate depends on the estate and the will you have to prove. The presence of a will can make probate a shorter and easier process because everything has already been planned and assets have been assigned to beneficiaries.
How long probate takes also depends on state laws. In some states, if you’re dealing with a small estate the probate process can take as little as 2 months. In other states, probate is a lengthy process that can take up to two years.
Check with your attorney and state laws to make sure you file for probate in time.
Who initiates probate?
What happens during probate?
A representative, either the executor named in the will or an individual named by the probate court, will be appointed to disperse real and personal property. This individual also collects debts owed to the deceased. The will is validated by the probate court. If there is no will, then the probate court designates a legal heir (usually a close relative) to serve as administrator. A list of assets from the estate are presented to the probate court. Beneficiaries named in the will, or heirsat-law if there is no will, are notified that the probate process is taking place. Creditors are notified of the proceedings so they can file claims for any debts owed to them. State and federal taxes are paid from the estate. Title to decedent’s property, such as real estate, bonds and stocks, is cleared so that the property can be passed onto beneficiaries or sold.
How long will probate take?
Probate is a complicated issue with many moving parts involved and it can last anywhere from eight months to several years, if the estate is challenged by family members at odds with the decision. Typically, probate will take about a year, but the exact factors for determining a timeline will depend on each person’s unique situation.
Do I need an attorney?
While you are not legally required to retain an attorney during probate, the entire court process is complicated and tedious, and requires a dedicated attorney who understands probate laws and regulations. Most people do not have the time to make court appearances, gather documents and file the correct paperwork, let alone even have the knowledge to know how to do so correctly. Any missed deadlines or incorrectly file documents will only cause a huge delay in the probate process and keep your family’s assets tied up in court for much longer than they need to be.
Find and Begin Working with a Probate Attorney
Contact a probate lawyer who will help you and represent you as the will goes through probate. Your probate attorney is your best ally because he will become an integral part of the probate process.
Your attorney will do things such as: file documents with the court, help collect any money obtained from life insurance, problem-solve income tax issues, and more. He will also be your general advisor throughout the entire probate process.
How do I retain a probate attorney?
For an online list of certified lawyer referral services, visit the State Bar’s website at www.calbar.org. For phone numbers of certified services in your county, call 866-44-CA-LAW (866.442.2529). If you are out of state, call 415.538.2250. Or check the Internet or Yellow Pages of your telephone directory for a listing. (Keep in mind that the service’s State Bar certification number must appear in all advertising.) Other sources are www.avvo.com or www.martindale.com. Referral services is only for California
What is a Preliminary Report?
A preliminary report is a report prepared prior to issuing a policy of title insurance that shows the ownership of a specific parcel of land, together with the liens and encumbrances thereon which will not be covered under a subsequent title insurance policy.
What role does a Preliminary Report play in the real estate process?
A preliminary report contains the conditions under which the title company will issue a particular type of title insurance policy.
The preliminary report lists, in advance of purchase, title defects, liens and encumbrances which would be excluded from coverage if the requested title insurance policy were to be issued as of the date of the preliminary report. The report may then be reviewed and discussed by the parties to a real estate transaction and their agents.
Thus, a preliminary report provides the opportunity to seek the removal of items referenced in the report which are objectionable to the buyer prior to purchase.
Will the Preliminary Report disclose the complete condition of the title to a property?
No. It is important to note that the preliminary report is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land, but merely report the current ownership and matters that the title company will exclude from coverage if a title insurance policy should later be issued.
How will you market my property?
Research has shown that buyers spent more time looking at a house which had more photos. At Nicholas Realty we contract a professional photographer to take pictures and virtual tours. The same videos are used on YouTube and other websites. This service is used on every listing we have no matter what the size or price range. The main goal is to market your house and to encourage buyers to view your home. We want as many buyers looking at your property as possible.
What are “date of death” appraisals?
When an estate has a transfer of ownership due to death or inheritance, it is very common for a real estate appraisal to be needed for tax purposes. Typically, a family member or heir chooses an appraiser for the job at hand, or an attorney or accountant will order the appraisal.
Estate or probate appraisals are commonly ordered between 2-6 months of the death of a loved one (or inheritance of property). Sometimes the appraisal is ordered right away within two weeks, while other times there is a much more substantial time period.
Which is the most accurate: My realtor’s CMA or Online Home Estimators?
Online websites result in 70% accuracy, that is not very accurate. An experience realtor uses data by selecting sold properties within 90 days and are similar to the subject property for instance, square footage, bedrooms, amenities, zoning, and within 1-mile radius from subject. By comparing these properties, and adjusting for feature differences, an estimate of value is made for the subject property. This is almost equivalent to a home appraisal. An appraisal report overrides any other home value report.
Do I have to clean out the whole house before listing it?
Yes, a house that is filled with personal belongings is one of the most difficult to sell. It is wise to clear all personal property out before listing the house for sale. Ask Nicholas Realty about his free service. Remember a buyer will pay more for a house, which has all the personal property removed.
Why Overpricing Your Home Can Be A BAD Idea?
Of course, you want to get the very best price you can get for your home when you sell it.
We know your family intended to transfer their wealth and belongings to their family and not to an investor. They saved their money and worked very hard to purchase their property. You know what was paid for and how much time and money they put into improvements, or perhaps they custom built it and you know the high-quality material that was used. But when it comes time to meet with a Realtor to discuss your Comparative Market Analysis (CMA), you might feel respected at the asking price they propose to you. It may be far less than what you think the place is worth. It’s common for there to be a discrepancy between what your Realtor suggests you list a property for and what you think they should be able to sell it. Perhaps you’ll think that the Realtor should try listing it at your preferred listing price, thinking you can always reduce the price later if you can’t get what you think it’s worth, even when your preferred listing price is at odds with the CMA. Also, web-based estimate to validate the price of a property is very common but most website are 70% accurate. That is not very accurate
Here’s the Thing: Overpricing Your Property Can Backfire
Scaring Off Buyers
Many buyers work with buyers’ agents and if their agent tells them your property is overpriced, they will often strike it off their viewing/consideration list. This is information your Realtor may receive useful feedback about; if other agents tell your agent, that the property is overpriced, you can be sure they are likely to tell their buyers the same thing. Buyers agents don’t want to waste their time, if your property is overpriced then the agent’s faith in their ability to sell it will be diminished, many of them simply won’t bother bringing their buyers to view your listing at all. If you price your property higher than the suggested market value, then your property is likely to have far fewer potential buyers view or consider it.
What happens If the Listing is on the market Too Long?
If a property is for sale for too long, it begins to lose appeal to potential buyers. Perception of the value of a property can fall in the eyes of buyers when they are comparing properties in a similar price range and one has been on the market far longer than the others. All too often we see sellers list their property at a very high price despite their Realtor’s CMA and then the listing stays above market value for a long period of time: months, even years, until those properties eventually sell for less than the listing price initially suggested by the sellers’ Realtor. A property that is priced at the suggested market price will sell more quickly. More Realtors will tend to bring their buyers through to look at it, and the property doesn’t start to raise questions as to why it has been sitting on the market for so long.
Financing Problems for Buyers
When buyers depend on banks for financing their real estate purchase, the property and price are scrutinized by the bank. If the bank considers the purchase price to be too high above the current market value, the bank may decline to finance the buyer.
Realtors willing to list above current market value
There are real estate agents that may encourage or easily agree to a seller overpricing their properties for reasons that possibly will not benefit the seller. Some Realtors focus on gathering more listings as the more listings they have, the more general buyer inquiries they will receive, but that doesn’t necessarily mean the buyers will be steered towards the overpriced listings. If you are comparing market assessments from different Realtors, one would suggest you exercise some skepticism if one CMA comes back with a significantly higher price point. The process in which Realtors prepare a CMA is such that generally speaking, realtors tend to assess home values quite similarly, particularly when they are familiar with the neighborhood and region of the listing.
Buyers determine current real estate prices, not the sellers.
The price buyers are paying for properties at any given time determines what the current market value is.
If your home is overpriced far beyond where current market conditions realistically stand, you are less likely to attract buyers, savvy buyers will overlook your listing in favor of listings that are more competitively priced, and you could prolong the period your listing is for sale to the point where buyers begin to perceive the value of your property lower than what you could have sold it for with a more reasonable starting price point. Current market conditions describe the prices and preferences of buyers and are a more reliable gauge of how a listing should be priced than what any given seller hopes to get for the sale of their property.
