Mary Jones, the owner of a property, has died. Her daughter, Sally has been appointed as the Personal Representative (“PR”) of her mother’s estate. You represent either the seller of the property (the decedent’s estate) or the buyer seeking to purchase the property.

In last month’s issue, we discussed who can execute the listing agreement and how to determine if Sally has proper authority to act on behalf of the estate.

1. What comes next?

After the purchase and sale agreement is executed, the next step is to have Sally’s attorney prepare and file a petition for the court to hold a hearing to approve the sale of the property. All interested parties should be notified of the hearing. You should be sure that the buyer is notified of the hearing and the fact that the property will be subject to open bidding in court.

At the hearing, The Probate Commissioner will call the matter and ask if there is anyone interested in bidding on the property. He is required by law to do so. He will accept bids in open court. He will then enter an order awarding the sale to the highest bidder, which can be your buyer or any third party.

The successful bidder, if different from the buyer on the contract, essentially acquires all rights and duties under the contract, except that it’s at the higher purchase price. The new buyer is required to close at the same time and under the same terms and conditions set forth in the contract. If he doesn’t, he’s personally liable and the court can enter a judgment against him.

In years past, it was not uncommon to see full-blown bidding wars in court. The good news is that those days are largely in the past. Nowadays, it is rare to see any bidding in court. Your buyer will most likely be able to have his or her contract approved by the court. The downside is that having the uncertainty of what could happen at the hearing could discourage otherwise interested buyers.

2. Finally, the Sale.

After the court approves the contract, the parties can proceed to close as set forth in the contract. You will need to provide the escrow company with a certified copy of the order approving the sale. Finally, Sally as the PR of the estate will execute and deliver a PR’s Deed conveying clear title to the buyer.

3. Are there any other alternatives?

Yes. Waiting until the probate is finished and purchasing the property from the beneficiaries is always an option. If the probate is near completion when the parties are

ready to close, and all the beneficiaries are on board with the sale, it almost always makes sense to simply wait until the probate is finished.

4. Are there any risks in waiting?

Yes. If there are multiple beneficiaries of the estate, you now run the risk of not all of the beneficiaries agreeing to the terms of the sale. Some may not even want to sell. If any of the beneficiaries are minors, they will need a further court order to sell the property.

One advantage of selling a property in probate is that you need only deal with the Personal Representative of the estate.

For all of you brave enough to venture into the world of probate sales, best wishes on a smooth transition through the process and a happy outcome for all!