Probate Real Estate Sales

Prior to the sale of real property, including real estate, an Executor or Administrator must be appointed.  Typically an Executor is named in the decedent’s will.  If there is no will, or the named Executor is unable or unwilling to serve in that capacity, the court will appoint an Administrator.  In either case the named individual will be responsible for the sale, or disposal, of the estate property.

The Executor or Administrator has two options concerning the sale of the assets in a probate proceeding.

The increasingly popular path is under the Independent Administrator of Estates Act (IAEA) by which no court confirmation is required.  This is referred to as “Full Power”.  The Executor/Administrator receives this power by filling out an application.  Typically, if he/she wants the right to sell real estate without court confirmation it is granted by the court.  If authority is granted the letters testamentary must also indicate that authority.

Under the IAEA the Executor, or Administrator, does have a requirement to give written notice (A Notice of Proposed Action) to all beneficiaries who may be affected by the sale at least 15 days prior to the proposed sale date.  Note: In some cases the Executor or Administrator is granted only “Limited Powers” which confers the right to sell all estate property without court approval except real estate.

The Executor or Administrator may also seek court confirmation, also known as “No Power”.  This option comes with certain requirements.  First, the accepted offer on real property must be at least 90% of the value established by the Probate Referee.  Once an offer is accepted a court hearing is scheduled by the attorney for the Executor.  During this period a knowledgeable REALTOR ® will continue to market the property.  Additionally, the attorney must arrange for a Notice of Hearing to be published.  During the court confirmation hearing the originally accepted bid may be overbid by another interested buyer.  The minimum opening overbid is 5% + $500 of the original contracted sales price.  On an original contract price of $300,000 the first minimum overbid would be $315,500 ($300,000 + $15,000 + $500).  Subsequent bids are determined by a formula established by the court.