The Complexities of Selling Probate and Inherited Property in California: Your Questions Answered

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Losing a loved one is a sad and difficult time for family, relatives, and friends. In addition, those left behind must often figure out how to transfer or inherit property from the person who has died.

Are you facing the task of selling a probate or inherited property in California and feeling a bit overwhelmed? You're not alone. This process can be complex, but understanding the basics can make things a lot smoother. Let's dive into some of the most commonly asked questions, broken down into simple, everyday language.

In California, to transfer or inherit property after someone dies, you must usually go to court. Dealing with the courts and the property of someone who has died is extremely complicated. Having the right documentation and being prepared in advance will eliminate the headache. Unfortunately, all too often most of us are ill prepared. In general, if you die without a will (or trust) the state of California may end up the decision maker of your estate. This process is commonly referred to as probate.

 1. What Exactly is a Probate Sale in California?

A probate sale happens when someone passes away and their property needs to be sold through the court system. This is overseen by either an executor (if there’s a will) or an administrator (if there’s no will).

 2. Do All Inherited Properties Require Probate?

In most cases, yes. If the property was only in the deceased's name, it typically has to go through probate. But, if it's a smaller estate, there might be a more straightforward process.

 3. How Long Does Probate Take?

This can vary. It might take a few months to over a year, depending on how complicated the estate is. On average, it's somewhere between 9 to 18 months.

 4. Can I Sell a House During Probate?

Yes, but you’ll need the court’s nod. The sale follows certain rules and might involve a public auction.

 5. Are Probate Properties Cheaper?

Not always. The goal is to sell at a fair market price, but sometimes you might find a good deal.

 6. How Does Bidding Work in Probate Sales?

Interested buyers submit offers, and the executor picks the best one. However, this can be outbid at a court hearing.

 7. What’s an Executor's Role in Selling Probate Property?

Executors manage the estate. This means handling debts, paperwork, and overseeing the property sale, always keeping the estate's best interest in mind.

 8. What About Taxes on Inherited Property?

Inheriting doesn’t immediately mean taxes. But selling it later? That might involve capital gains taxes, depending on the property's value change since you inherited it.

 9. Can I Sell Probate Property As-Is?

Yes. You can sell it in its current condition, but you must be upfront about any issues the property has.

 10. What Happens to the Mortgage on an Inherited House?

This needs to be sorted out. It can be paid off using the estate’s funds, or sometimes the new buyer can take over the mortgage. If it’s not dealt with, the property could face foreclosure. Read more on what happens to the mortgage below.

 11. Can I Buy a Probate Property Without Cash?

Absolutely. You can get a loan, but having cash or pre-approved financing might give you an edge.

 12. What's a "Notice of Proposed Action"?

This is a heads-up to heirs and beneficiaries about the intent to sell the property. They get a chance to object if they have concerns.


What Happens to the Mortgage?

Inheriting a property often comes with a big question: What happens to the mortgage? It's a common concern, and understanding this can make a world of difference in how you handle the inheritance.

When someone passes away and leaves a house with a mortgage, that mortgage doesn't just vanish. The responsibility of dealing with it falls to the new owner – the heir. If the estate has enough assets, sometimes these are used to pay off the mortgage. But what if the estate can’t cover it?

Typically, the heir has a few options. The most straightforward one is to keep the property and continue making mortgage payments. Thanks to certain laws, lenders usually can't demand the full balance immediately after the original borrower's death. This means you, as the inheritor, can keep making regular payments under the existing mortgage terms.

Another option is selling the property. If you choose to sell, the proceeds from the sale go towards paying off the mortgage. Whatever funds are left after clearing the mortgage debt then become part of the estate or go directly to the heirs, depending on the terms of the will or state law.

However, there are cases where the mortgage balance is higher than the property's value. In these situations, you might consider a short sale, where the property is sold for less than the owed mortgage amount. Alternatively, if maintaining the mortgage is not feasible, allowing the lender to foreclose is another option.

Refinancing is another route some heirs choose. This means taking out a new mortgage in your own name, ideally with more favorable terms or a more manageable payment structure. It's a significant decision, as it transfers the mortgage responsibility entirely to you.

It's important to note that inheriting a property with a mortgage doesn't automatically mean financial strain. Each situation is unique, and it's crucial to assess your options carefully. Consulting with financial advisors or real estate professionals can provide clarity and guidance tailored to your specific circumstances.

Inheriting property can be a complex process, especially when a mortgage is involved. Understanding your options and the implications of each can empower you to make informed decisions that align with your financial situation and future plans.

How to Purchase Probate Property

Purchasing a probate home can be a unique opportunity in the real estate market, but it's a process that comes with its own set of rules and nuances. Here's a closer look at how you can navigate buying a probate property.

 Understanding the Probate Sale Process

1. Probate Listing:

   - Probate properties are often listed through a real estate agent, similar to a standard home sale. However, the listing will typically indicate that the sale is subject to probate court approval.

2. Making an Offer:

   - When you find a probate property you're interested in, you submit an offer through your real estate agent. This offer is usually accompanied by a deposit, often a percentage of the offer price.

3. Court Approval Process:

   - Once your offer is accepted by the estate’s representative (executor or administrator), it must be approved by the probate court. The court ensures that the estate’s interests are being adequately served by the sale.

4. Overbidding in Court:

   - Probate sales often involve a court hearing, where the initial accepted offer can be subject to overbidding by other interested parties. This means you may end up in a bidding war in the courtroom. If someone outbids you, they must usually have a cashier's check for at least 10% of their offer price on hand.

5. Confirmation of Sale:

   - If your offer is the highest and the court confirms the sale, the process moves forward. If another buyer outbids you, the property goes to them.

 Tips for Buying Probate Homes

1. Research and Due Diligence:

   - Thoroughly research the property and understand the value. Probate sales are often "as-is," meaning the estate won’t make repairs or give credits for defects.

2. Financing:

   - Have your financing in order. While cash offers can be more appealing in a probate sale, you can also use traditional financing. Just ensure your financials are solid and pre-approval is in place.

3. Patience is Key:

   - Probate sales can take longer than traditional sales due to the court process. Be prepared for a potentially lengthy process.

4. Consult Professionals:

   - Work with a real estate agent experienced in probate sales. They can guide you through the complexities of the process. Additionally, consulting with a legal professional can provide valuable insights, especially in understanding any legal nuances.

5. Be Prepared for Emotional Factors:

   - Selling a home in probate can be an emotional process for the sellers, as they are dealing with a property tied to a deceased loved one. Being sensitive to this can be important in interactions.

6. Closing the Deal

Once the court confirms the sale and you’re the winning bidder, the process moves to closing, similar to a standard real estate transaction. You’ll complete the necessary paperwork, finalize your financing, and close on the property.


Remember, buying a probate home can offer great value, but it's essential to enter the process well-informed and with the right expectations. With patience and the right guidance, purchasing a probate property can be a rewarding investment.


 Wrapping It Up

Selling a probate or inherited property in California can seem daunting, but understanding these key points can ease the process. Remember, every situation is unique, so when in doubt, it’s always wise to consult with a professional experienced in probate sales.

Discover the insightful world of real estate with "Selling Sacramento: Insights from Agent Kee," now available as a podcast. Whether you're on the go or relaxing at home, join us for engaging discussions on everything from probate and inherited properties to the latest market trends. Our podcast is accessible on a range of platforms to suit your listening preferences. Tune in on Spotify, Amazon Music, Apple Podcasts, Castbox, Google Podcasts, iHeartRadio, Overcast, Pocket Casts, and RadioPublic. Start your journey into the depths of real estate knowledge with us. For easy access to our podcast on Spotify, visit [here]( and immerse yourself in the expertise of Agent Kee.

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