Limited Authority Probate Sale (and overbid procedure)
Your certified Probate Realtor will list your property in concert with the value established by the Probate referee and under the supervision of the probate court. Once the property is fully exposed to the market and once the personal representative accepts an offer, a date will be set with the court to approve the sale.
For the court to confirm the sale, an acceptable offer must be at least 90% of the Probate Referee’s appraised value, which value must be set within one year prior to the confirmation hearing. Prob. C. §10309.
The Original Buyer must deposit 10% of the purchase price prior to or on the day of the hearing. If the court confirms the sale to the Original Buyer, their deposit is applied towards the purchase price. If the court confirms the sale to an Overbid, the Original Buyer is refunded their deposit.
The court will set the overbid increments (i.e. $500; $1,000; etc.) but the first overbid must exceed the Original Bid by 10% of the first $10,000 plus 5% of the remainder after the initial $10,000). Prob. Code §10311(a), LR 14.65(D).
Property listed at $400,000. Accepted Offer is $360,000.
10% x $ 10,000 = $ 1,000
5% x $350,000 = $17,500
Minimum overbid is $360,000 + $1,000 + $17,500 = $378,500.
Bidders must have at the hearing a cashier’s check (or cash) for 10% of the overbid amount in order to be considered. LR 14.65(E). Bidders are advised to bring written and signed bids with the amount initially left blank, to be filled in as soon as the highest bid is accepted. If the Buyer defaults after the sale, their deposit may be forfeited.
The overbidder DOES NOT need to announce to anyone what he will willing overbid on the property, only to the judge.