Probate Home Sales in California: Court Confirmation, Overbids, and Notice of Proposed Action

Selling a house during probate is not one process. It is two, and which one you are in was decided the day the court appointed the personal representative. The difference determines whether your buyer can close on a normal escrow timeline or has to sit through a court hearing where a stranger can outbid them.

Which track are you on? Full authority or limited authority

Most California estates are administered under the Independent Administration of Estates Act, Probate Code § 10400 and following. The order appointing the personal representative grants either full authority or limited authority, and it says which on its face. Read it before you sign a listing agreement.

Limited authority does not include the power to sell real property. If that is what the order says, every sale of the house runs through the court confirmation process described below, and there is no way around it short of petitioning for expanded authority.

Full authority does include it. Under Probate Code § 10503, when the personal representative sells under that authority, the court confirmation requirements do not apply to the sale. That means no publication of a notice of sale, no court approval of the broker’s commission, no 90 percent floor, and no overbid at a hearing. The tradeoff is the notice requirement in the next section.

The Notice of Proposed Action, and the 15 days that matter

Full authority is not permission to sell quietly. Before selling the house, the personal representative generally has to give a Notice of Proposed Action to everyone entitled to one, which means the beneficiaries and anyone else with an interest in the estate who has not waived notice.

Under Probate Code § 10586 the notice has to be delivered not less than 15 days before the date specified in the notice on or after which the action is to be taken. It describes what the personal representative intends to do, in enough detail that a beneficiary can tell whether they object.

If nobody objects, the sale proceeds. If someone does object in writing before the action is taken, the personal representative either does not proceed or goes to the court for an order. In practice, an objection converts a full-authority sale into a supervised one, which is why the notice is worth doing carefully rather than treating it as a formality. Beneficiaries who feel informed rarely object. Beneficiaries who first learn the house sold when they see the accounting frequently do.

Court confirmation: the 90 percent rule

When the sale does go through court confirmation, Probate Code § 10309 sets three conditions that all have to be met before the court will confirm a private sale:

• The property has been appraised within one year before the confirmation hearing.
• The valuation date used in that appraisal is within one year before the hearing.
• The amount offered is at least 90 percent of the appraised value.

The appraisal is normally done by the probate referee. If the court is satisfied the latest appraisal is too high or too low, it can order a new one. That 90 percent floor is the reason a probate listing cannot simply take the best offer on the table if the offer comes in low; the court will not confirm it.

The overbid, and why your buyer may lose the house at the hearing

This is the part that surprises everyone, including buyers who have already paid for an inspection.

At the confirmation hearing, anyone can show up and bid. Under Probate Code § 10311, if a written offer is made to the court at the hearing, the court shall accept it and confirm the sale to that person if the offer is high enough, comes from a responsible person, and complies with the law. The threshold is fixed by statute:

at least 10 percent more on the first ten thousand dollars ($10,000) of the original bid and 5 percent more on the amount of the original bid in excess of ten thousand dollars ($10,000)

Worked through on a $500,000 accepted offer, the first overbid has to be at least $525,500: the original $500,000, plus $1,000 (10 percent of the first $10,000), plus $24,500 (5 percent of the remaining $490,000). If more than one qualifying offer is made, the court takes the highest. Bidding continues from there in increments the court sets.

Two details worth knowing. The court can decline to accept an overbid and order a new sale instead. And when the court compares bids, it disregards any broker’s commission built into the number, so the comparison is on the price itself.

What this means for the family

If you are the personal representative, three things follow. Find out which authority you hold before you list. Give the Notice of Proposed Action early and in plain language, because the 15 days run from delivery and an avoidable objection costs far more than the notice did. And if you are in a confirmation sale, tell your agent and your buyer up front that the accepted offer is a starting bid, not a closing.

If you are a buyer, understand that in a confirmation sale your accepted offer buys you the right to be outbid in a courtroom. Some buyers are fine with that. Nobody should find out at the hearing.

Meanwhile the estate keeps paying. Property taxes, hazard insurance, and upkeep do not pause while any of this happens, and a vacant house can void a standard homeowners policy unless a vacancy endorsement is in place. In my experience a house in the estate pushes a probate toward the long end of the twelve to eighteen month range. No California court publishes a median, so treat that as an observation from practice rather than a statistic.

What to do next

If a house is the main asset, start with real estate in California probate for the thresholds and the property tax consequences, and what happens when the house is the only asset if you may be able to avoid full probate entirely. For the overall sequence and deadlines see the California probate timeline, and for what the process costs see what probate actually costs. If you are the one who was appointed, the executor’s duties covers the rest of the job.

This page is part of Estate Planning Statistics and California Guides, Ridley Law’s reference library on California probate and estate planning.

Talk to Ridley Law

If you have been appointed and there is a house to sell, the first question is which authority your order actually grants, because everything else follows from it. Ridley Law will read the order with you and tell you which process you are in. Talk to Eric.