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What Realtors Must Know About Probate

In California, if your client dies without a living trust and his or her house is worth more than $150,000, then the only way you can sell the house is to have your client go through a probate. 

The probate process starts with filing of the probate petition. You cannot sign the listing agreement unless the court has issued your client a form called "Letters". Letters signifies that your client is the official personal representative of the deceased’s estate. This form will tell you if the personal representative has either full or limited authority to sell the house. If you are selling real estate, you always ask the probate attorney to petition the court to give your client full authority. 

If full authority is granted under the IAEA, then your probate transaction is almost like any other normal real estate transactions. After the court issues "Letters" with full authority, then you could sign the listing agreement, market the property, and accept an offer. The probate attorney then mails out another form called the "Notice of Proposed Action" and if no one objects after 15 days then you can close escrow. However, if the court grants your client only limited authority under the IAEA then the process of selling real estate in probate becomes significantly  more complicated. Under limited authority, your client must publish a notice of sale in a local newspaper, file a form called "Report of Sale and Petition for Order Confirming Sale of Real Property", and attend a court hearing where the sale will be subject to an auction known as the "overbidding process". The judge will sign an order with the name of the winning bidder on it and then you can close escrow.