The San Diego housing market is rapidly growing. Prices are rising all across San Diego County from Escondido to San Ysidro.
It seems that prices hit all-time highs every few months (except for a minor dip). You can find a decently priced home in Santee and El Cajon, but you may have to fight through traffic. You can find numerous single homes throughout North Park, South Park, Golden Hill, and other neighborhoods that ring Downtown, though they may cost more. Prices are rising throughout San Diego — you just need to look to find the perfect home.
The inexorable rise in prices probably leaves you thinking that you will never be able to afford your own home. However, there are numerous legal avenues you can utilize to acquire a home (albeit maybe not your dream home but it’s a start). Probate sales may not give you exactly what you want, but it provides you with a start in San Diego, one home can beget another, and before you know it, you are settling down in the perfect house, in the perfect location.
What is a Probate Sale?
A probate sale is put on by the probate court. When a person passes away without a will, their estate is distributed via intestate rights. Intestacy refers to the legal process by which probate court reviews the deceased person’s assets and heirs to determine how much each heir receives from the estate, the debts to be settled, and what to do with the remainder of the estate (if any).
A probate sale occurs when the court puts the property up for sale in the market. The court, like in any other sale, will try to fetch the best price for the property (but that does not always occur, similar to the result found in foreclosure sales).
How does the probate process work?
First, the court appoints an administrator or executor (two words that mean the same thing). If the court is unable to find someone who is willing to serve, the court will solicit volunteers from the family. The administrator is tasked with selling the property.
Second, the administrator needs to appraise the property to estimate its fair market value. The administrator must sell the property for at least 90 percent of the appraised value. The buyer is required to put down at least 10 percent of the value as a deposit. The seller is permitted to accept or reject the offer (and down-payment).
Finally, once the seller accepts an offer, it must be confirmed by the court. If the court rejects the offer, then the sale does not proceed (additionally, the buyer cannot seek damages against the seller because a contract is not established until the court confirms the sale). The court, once it confirms the sale, will set the final date for the sale to take place.
When the court is considering whether to accept the offer, it opens up the property to anyone present in the courtroom. Anyone in the courtroom may make a superior bid of at least 5 percent (plus $500) above the original bid. The court will continue to accept bids until the sale is finalized. The original buyer, if outbid, will get her 10 percent deposit refunded.
Next, once the offer is accepted, the administrator must send a Notice of Proposed Action to all heirs. The Notice advises the heirs of the terms of the sale. The heirs are given 15 days to review the Notice and lodge any objections to the sale with the court. If objections are lodged, the court must have a hearing and review the sale. If no objections, the sale proceeds as planned.
What to know about buying or selling probate property
Probate sales are advantageous to both sellers and buyers because it provides an open forum to acquire property. If you have the cash and are willing to move quickly, you can buy a home in a fraction of the time as you would close on a house in the private sector.
Sellers are protected by the process because the court will not accept low bids. Moreover, if the property is popular, the bidding process can result in substantially increased sales prices.
Probate is an advantageous process for both sellers and buyers. However, it is also a complicated process.
If you are trying to sell a property through probate, you may want to contact an experienced real estate agent for assistance. The basic rules may sound simple however it is must more difficult to enforce. You must collect the deposit, warn the buyer that the sale isn’t final, and advertise the sale. If you are looking to buy or sell a home, Steele San Diego Homes can help you.