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Probate and Trust Tips

Tip: Five Costly Mistakes to Avoid when Listing Your Home for Sale

  1. Set your asking price too high. This is the number one mistake that sellers make. A high asking price dramatically reduces the number of qualified buyers (and their agents) who will look at or consider your house and it lengthens the time the house will remain on the market unsold. A slightly-below-market asking price significantly increases buyer activity and may even generate multiple offers that bring the selling price up to the seller’s original hoped-for amount!

  2. Rely on out-of-date information. In a volatile marketplace, comparable sales from last year or sometimes even last month may be too old to be valuable. Be sure to examine figures for properties near yours that have similar attributes and have sold recently; asking prices have little significance—rely on recent sales only.

  3. Don’t read the fine print. You’ve heard the expression “Buyer beware”? Well, the same goes for sellers! Read every document carefully and ask for explanations of any terms you don’t understand. There are no stupid questions when it comes to contracts. Your real estate agent should be able to give you clear explanations; if not, you might question whether they have the skills to represent you!

  4. Dismiss the importance of “online curb appeal.” Today’s tech-savvy buyers begin their home search online and photographs are the first thing they look at. Make sure the photos show your property clearly. Appeal to buyers by posting pictures of one or two things you consider really special about your home.

  5. Represent yourself. Many homeowners think they will save money by listing their home for sale without the benefit of a real estate agent. In fact the opposite is true. Not only do such owners increase their stress and compromise their security, they end up netting less than those who enlist—and pay for—the services of a skilled agent.

Tip: Five Things You Need to Know When Buying a Property in Probate

  1. Probate properties are sold “as is” so don’t expect the owner to make repairs or improvements—or to lower the price because of existing problems.

  2. Read the disclosures! There are special disclosure documents governing probate sales, so be sure you understand the terms before you make an offer.

  3. Be prepared in court. If a probate sale requires court confirmation, the timing and amount of your offer and the form in which you make your deposit are closely regulated.

  4. There are usually no contingencies on probate sales. In other words, the seller does not have to wait for you to find a loan or to sell your existing home. Get advance approval from your lender.

  5. Work with a probate expert. When you are selecting a real estate agent to assist you with your purchase, ask for details of their recent probate experience in your marketplace. While any agent can represent you, only a probate expert can assure that your transaction is managed correctly so you get the property and the terms you want.

Tips for Overbidding in court

Tips for Overbidding in Court: Keep Your Poker Face and Don’t Over-Pay

A probate property that requires court confirmation allows for interested buyers to come to court and over-bid the initial offer.

There are important terms and conditions for probate sales—terms that make them different from other real estate transactions. While you should always check the terms prior to making an offer, in general, the terms of the sale are as follows:

  • The property is sold “As-is”

  • No contingencies

  • No repairs, including no termite or retrofitting

  • 30-day escrow

  • Seller pays for the escrow fees and title insurance fees

As an overbidder in court, if you are the successful buyer, you will purchase the property under the same terms and conditions as the party who made the original offer. Unlike other real estate deals, you can’t ask for different terms in the hope of improving your chances of getting the property.

Once an initial offer has been accepted by the court, the minimum overbid in court is established according to a set formula dictated by the Probate Code: the accepted offer plus 10% of the first $10,000 plus 5% of the balance.

Example:

A property is listed at $200,000.

The accepted offer is $175,000.

The minimum overbid is calculated as follows:
.10 x $10,000 = $1,000
+ .05 x $165,000 = $8,250

$9,250
+ Accepted offer $175,000
Minimum overbid $184,250

x .10 of minimum overbid
Cashier’s check amount = $18,425

For the probate attorney and the court to allow you to overbid on the property, you must have in hand a cashier’s check for at least 10% of the opening bid. Personal checks are not accepted. The cashier’s check must be made payable to either the estate, the trust or the conservatorship. This information is available from the listing agent before you come to court.

When the judge calls the sale and you stand up to overbid, the judge will state what the opening bid is and set the increments for increases.

Here are some tips to increase your chances of being the successful purchaser:

  1. Be prepared. Make sure your agent has reviewed the sale comparables with you in advance so you know you are purchasing the property for what you feel it’s worth.

  2. Be aware in advance and understand the terms of the sale. These terms are not negotiable.

  3. Bring your poker face. Don’t let the opposing bidder know what you are willing to pay.

  4. Although the judge may say that the next bid is $5,000 more, you can always offer more than that to show your competition that you are serious. When a bidder jumps the bid higher than the judge dictates, the other bidder may back off.

  5. Know your top dollar and at what price you are going to walk away from the property. Don’t get caught up in the competition of bidding.

  6. Again, make sure you have a cashier’s check, that it is payable to the right party and that it is for at least 10 percent of the minimum overbid. If the check does not meet those standards, you won’t be able to play, no matter how much you want the property.

If you would like more information on overbidding in court or more information about a specific property that is going to court for confirmation, Our Team is ready to assist you today.