Selling Real Property in Probate
The sale of real property in probate must go through the supervision of the court in order for the title to be marketable. This is always the case where a person dies intestate (or without a last will and testament). Or, where there is a last will and testament, but it lacks a “Power of Sale Clause”. In other words, the court must sign off on any proposed sales and the terms of the sale prior to closing on the real estate transaction. The “Power of Sale Clause” allows a Personal Representative to sell real property without court approval. Read our article on Tips for Selling Real Property in Florida:
In furthering the sale, the court will likely ask for an appraisal of the property and/or other record(s) of just value. The court may also require you to advertise (market) the real property to the public, require a waiting period, and allow other prospective buyers the opportunity to make bids prior to the sale (at the probate hearing). The usual deposit held for the purchase of real property in probate is ten (10%) percent, upon executing a purchase and sale contract. It is not unusual for an initial buyer to ultimately not receive the property if other (higher) bids are placed to purchase the property at the probate sale hearing. These bids are typically placed by investors who are savvy in the realm of real property probate sales. In that case, the initial purchaser would receive a refund of their ten (10%) deposit, and will have no further recourse against the estate.
On the other hand, if a person’s last will and testament allows for the sale of real property outside of probate court approval (“Power of Sale Clause”), then the Personal Representative/Executor must only wait until the creditor claims period has expired (pending all proper notices have been sent and filed with the court). After the creditor’s period has expired, the estate may sell the real property without the court’s explicit approval. However, such sale will still be outlined in the estate accounting report submitted to the court for approval at the end of the probate.
Contact Capital Planning Law, PLLC for your complimentary consultation to discuss your estate planning, business law, probate, guardianship and/or real estate needs.
