In a perfect world, every house is held in a trust. This is because inheritance through a trust is a simpler process. In many cases, when you inherit property that is held in a trust, the courts don’t need to be involved. (Click here to read my article about how to sell an inherited property that is held in a trust.)
So what happens if there is no trust in place? What happens if there is only a will, or if there is no will? You will likely need court approval of the inheritance. This is called “going through probate.”
If you have inherited property, and you want to sell it, here’s what you need to know about probate sales:
- How to find out if you can avoid full probate
- What steps to take first
- Listing the property for sale
- Disclosure obligations
- The sales contract
- What happens after an offer is accepted
- Finalizing the sale
Can you avoid full probate?
Effective April 1, 2025, the maximum property value to avoid full probate has increased from $184,500 to $750,000. Today, if the property’s value doesn’t exceed $750,000, you may be eligible to skip the full probate process.
Read my article about AB 2016 to help determine eligibility, and next steps.
Questions about the property’s value? Contact me for a market analysis.
First Steps
If the property’s value exceeds $750,000, you will need to go to court to transfer or inherit the property. This is called “going through probate.”
The first step is to consult with a probate attorney, to ensure that the court will grant you authority to sell, either as Executor of a will, or Administrator.
Your attorney can help you with the Letters Testimentary or Administration, in which the court appoints a representative to sell the property. In California, this form is called the DE-150 – click here for a copy of the DE-150. Your attorney can also help you complete the Order for Probate, which in California is the DE-140 – click here to see a copy.
Ideally, the court appoints the representative with full authority, so that court confirmation may not be required once a property is in escrow. If not, the court may authorize with limited authority, which requries court supervision of the sale. This varies based on your situation, so check with your probate attorney.
Here’s a California Courts self-help guide that describes the probate process in detail. From start to finish, formal probate usually lasts 9-18 months, and costs thousands, if not tens of thousands of dollars.
Listing the Property for Sale
Once you are ready to sell, be sure to hire a REALTOR® who understands the probate process. Provide your attorney’s information to your agent and the title company, so that your attorney can provide assistance when needed.
Your REALTOR® will likely ask for a copy of the Probate Order, and the Letters Testementary or Administration. The title company should review these documents right away, to confirm that the correct person or people are signing the listing and sales contracts.
If the property is located in California, you will sign a Probate Addendum when you sign the Listing Agreement with your REALTOR®.
Disclosure Obligations
There are fewer required disclosures in a probate sale. Very often, in the place of longer questionnaire disclosures, the representative will have one questionnaire disclosure to complete, which is the Exempt Seller Disclosure.
At the same time, sellers are still required to disclose any material facts that could affect the property’s value. There are also a number of other required disclosures and reports you will need to provide to the buyer. Your REALTOR® should guide you through that process.
The Sales Contract
When a buyer writes an offer on a California property, a probate sale requires a Probate Agreement Purchase Addendum. This advises the buyer that court approval of the sale may be required.
After Offer Acceptance
Once you have accepted an offer, you or your attorney prepares the Notice of Proposed Action. In California, this is Form DE-165 – click here to see a copy. The Notice of Proposed Action, or NOPA, is how the representative informs any possible interested parties about the real estate sale. Depending on the situation, they have a certain number of days to object to the sale. If any potential heirs object during this period, then the court needs to step in to resolve any dispute.
Finalizing the Sale
The final step is to close escrow. Once the Notice of Proposed Action waiting period has elapsed, which depends on the type of authority the court grants to the representative, the sale can close. If the court grants full authority to the representative, the waiting period can be as short as 15 days.
Once the waiting period is over, and if no parties have objected to the sale, the probate attorney needs to provide the title company with an email or letter. This letter states that: all interested parties have been notified, the required time has lapsed, and no one has objected to the sale.
Even though a probate sale requires more steps than a traditional sale, the escrow period may not be any longer. Once the executor or administrator is established by the court, a probate sale can proceed just as quickly as a traditional sale, especially if the representative is granted full authority.
For More Information
Contact me if you have any other questions about a probate sale. I represent buyers and sellers of probate sales in San Diego, and south Riverside Counties. If your property is located outside my service area, I am happy to refer you to a local agent who can help you.
Good luck!
