What Is a Probate Sale?
When a decedent's will is subject to the probate process, there may be estate property that needs to be disposed of by undertaking a probate sale. Each state has varying statutes that regulate the probate process for a decedent's will. Every state has laws for conducting probate sales. It is necessary to consult the jurisdiction's particular laws for probate sales prior to beginning.
Probate Sale Process
At the beginning of the probate sale process, it is required thprat the executor or administrator's authority to enter into and conduct a sale of the estate property is confirmed and verified. The executor or administrator of the estate is the party who is appointed in the will or by the probate court to oversee administration of the decedent's instructions for the estate. Some states do not mandate that the court take part in a probate sale. Other states have a specific process in place for the court to confirm the seller's authority to enter into the parties' exchange. Even if the executor's authority does not have to be confirmed, the executor or administrator is under the obligation to act in a fiduciary capacity and to operate in good faith.
Confirmation by the Court
In some states, probate sales are subject to confirmation by the court. When a purchase within a probate sale is subject to confirmation, the underlying sale, as proposed, may not happen due to contingencies that impact outcomes. There may be a number of contingencies. For example, a buyer may have to place an amount of money into escrow. Or, the sale may be required to be published in the local newspaper for a certain period of time to allow individuals to have notice of the opportunity to openly bid. If the proposed bidder submits the highest bid, his or her bid amount wins and he or she has the right to buy the property in the probate sale.
When real property is part of a probate sale, the sales price must be fair for that particular property. Often, a property appraisal is required for a probate sale. If the appraisal does not meet a value within a set range of the proposed price, the probate sale might be canceled.
When a court is required to confirm probate sales, the process can become delayed and take significantly more time. Often, in states where court confirmation is mandated, it is up to the state's discretion whether real estate commissions are included in the sale.