Probate Court Confirmation and Overbids: How a Los Feliz Probate Sale Works

Probate court confirmation and overbids follow fixed rules in the California Probate Code. In a probate sale, the court must confirm the sale before title passes to the buyer. The exception is a sale made under the Independent Administration of Estates Act with full authority. A court-confirmed private sale must be at least 90 percent of an appraisal made within the past year. At the confirmation hearing, a higher bid must beat the original by at least 10 percent of the first $10,000 plus 5 percent of the rest.

This guide walks through how each of those rules works for a Los Feliz home. It also works out the overbid math for a $2,000,000 bid and a $3,500,000 bid. At Rooster Homes, Brandon holds the Certified Probate & Trust Specialist designation. We set the pace of every probate sale around the court's timeline.

This article explains how the process works. It is not tax or legal advice. For your own situation, talk with your attorney or CPA as well.

The starting rule is California Probate Code section 10308. Except as provided in section 10503, all sales of real property from an estate must be reported to the court and confirmed by the court before title passes. In plain terms, the price a buyer and the estate agree on is not final until a judge approves it at a hearing.

A private sale has two more conditions under Probate Code section 10309. The home must have been appraised within one year before the confirmation hearing. The price offered must be at least 90 percent of that appraised value.

Here is how the 90 percent floor works on a hypothetical home appraised at $2,500,000. Ninety percent of $2,500,000 is $2,250,000. An offer below $2,250,000 cannot be confirmed as a private sale based on that appraisal. The appraisal date matters as much as the number. An appraisal older than one year before the hearing does not meet the rule.

The Independent Administration of Estates Act gives the estate's representative a way to sell without a confirmation hearing. The Probate Code calls that person the personal representative. The Act grants either full authority or limited authority, and the difference decides how a home can sell.

• Limited authority includes every power under the Act except a few. The first one section 10403 lists is the power to sell real property.
• Full authority includes all the powers granted under the Act, per section 10402. That includes the power to sell or exchange real property of the estate under section 10511.

Full authority comes with a condition. Under section 10510, the power to sell real property can be used only if the Notice of Proposed Action procedure is followed. When it is, section 10503 says the court confirmation requirements do not apply to the sale. That includes publication of notice of sale and court approval of agent and broker commissions. It also includes the 90 percent of appraised value minimum.

One sale always stays under court supervision, even with full authority. Section 10501 lists a sale of estate property to the personal representative or to the representative's attorney.

A Notice of Proposed Action tells the people with a stake in the estate what the representative plans to do. For a home sale, section 10585 says the notice must state the material terms of the transaction. That includes the sale price and the amount of any commission.

Section 10581 lists who receives the notice:

• Each known devisee whose interest in the estate would be affected by the sale.
• Anyone who has requested special notice.
• The Attorney General when the property could pass to the state (escheat).

Timing is set by section 10586. The notice must go out at least 15 days before the date named in it for the sale.

Two rules decide what happens next. Under section 10589, a written objection means the representative must take the action under court supervision instead. Under section 10590, a person who received notice and did not object generally waives the right to have the court review the sale after it happens. The section lists exceptions. For a buyer, this means a sale under full authority can still move to court if an interested person objects in writing.

At the confirmation hearing, another buyer can offer more than the original bid. Probate Code section 10311 sets the minimum. The offer must be at least 10 percent more on the first $10,000 of the original bid and 5 percent more on the amount above $10,000.

The math has three steps. Take 10 percent of the first $10,000, which is always $1,000. Take 5 percent of everything above $10,000. Add both to the original bid.

Check the formula with a $1,000,000 bid:

• 10 percent of the first $10,000 is $1,000.
• The amount above $10,000 is $990,000. Five percent of that is $49,500.
• The minimum increase is $1,000 plus $49,500, or $50,500.
• The minimum overbid is $1,050,500.

A $2,000,000 original bid:

• 10 percent of the first $10,000 is $1,000.
• The amount above $10,000 is $1,990,000. Five percent of that is $99,500.
• The minimum increase is $1,000 plus $99,500, or $100,500.
• The minimum overbid is $2,100,500.

A $3,500,000 original bid:

• 10 percent of the first $10,000 is $1,000.
• The amount above $10,000 is $3,490,000. Five percent of that is $174,500.
• The minimum increase is $1,000 plus $174,500, or $175,500.
• The minimum overbid is $3,675,500.

A quick way to check your work: the minimum increase always equals 5 percent of the whole bid plus $500. Five percent of $2,000,000 is $100,000. Add $500 and you get $100,500, the same answer as above.

Meeting the formula does not guarantee the court accepts the higher offer. Under section 10311(c), the court may decline an offer that meets the requirements. In that case it orders a new sale. Your attorney can explain how the hearing itself runs in the local court.

A buyer on a probate home in Los Feliz is planning around the court as well as the seller. Here is what the rules above mean in practice.

• Your accepted offer is a starting point. In a court-confirmed sale, title does not pass until the court confirms. Another buyer can overbid at the hearing.
• Know the overbid number before the hearing. If you plan to overbid, work out the minimum with the formula ahead of time. If you are the original buyer, know the number someone else would need to reach.
• Ask which path the sale is on. A sale under full authority uses a Notice of Proposed Action instead of a confirmation hearing. It still has a notice period of at least 15 days, and an objection can move it to court.
• Price against the appraisal. In a court-confirmed private sale, an offer below 90 percent of the appraisal cannot be confirmed.

Our guide to buying a luxury home in Los Feliz covers how we prepare buyers before they write an offer. Our buying process shows each step from the first meeting to closing.

The representative's first question is which authority the court granted. That answer sets the whole plan for the sale.

• Limited authority or none: the home sells with court confirmation. Plan for an appraisal within one year of the hearing and a price of at least 90 percent of it.
• Full authority: the home can sell through a Notice of Proposed Action. The notice states the price and the commission. It goes out at least 15 days before the sale date to each affected devisee and anyone who asked for special notice.
• A sale to yourself or your attorney: this one stays under court supervision.

Rooster Homes is a Los Feliz, Los Angeles real estate team led by Brandon and Sarah Arlington (DRE #02051216). Brandon carries the Certified Probate & Trust Specialist designation, and our guide to selling an inherited luxury home explains how we prepare a probate or trust listing. For hillside homes, see our page on probate and trust sales in the Los Feliz Hills. The Los Feliz Hills is this site's name for the hillside above Los Feliz Boulevard. The City's SurveyLA calls the heart of it Los Feliz Heights.

If the home is held in a living trust, a different path may apply. The California courts' self-help guide lists property in a living trust among property that can transfer without probate court. Ask your attorney whether the steps in this article apply to your sale. Our post on selling an inherited luxury home in Los Feliz covers the rest of the process.

This article explains how the process works. It is not tax or legal advice. For your own situation, talk with your attorney or CPA as well.

Here is the order of events for a private sale that goes to court confirmation:

1. Confirm with the estate's attorney which authority the court granted.
2. Get an appraisal with a valuation date within one year before the expected hearing.
3. Accept an offer of at least 90 percent of the appraised value.
4. Report the sale to the court and ask the court to confirm it.
5. At the hearing, the court may receive overbids that meet the section 10311 formula.
6. The court confirms the sale or declines the overbid and orders a new sale.
7. After confirmation, title passes to the buyer.

A sale under full authority follows a shorter path:

1. Accept an offer on the terms the representative decides.
2. Send the Notice of Proposed Action with the sale price and commission at least 15 days before the sale date.
3. With no written objection, proceed with the sale. With one, take the sale to court supervision.

• Run the full overbid formula. Use 10 percent of the first $10,000 plus 5 percent of the rest. A flat 5 percent or 10 percent gives the wrong number.
• Check the appraisal date against the hearing date. The one-year window runs to the confirmation hearing. A hearing that moves later can push an appraisal outside it.
• Read the Notice of Proposed Action closely. Look for the sale price and the commission. If you object, put it in writing before the date in the notice.
• Ask about authority first. Learn whether the representative holds full or limited authority before you plan a timeline or an offer.
• Bring your attorney in early. The statutes set the rules. Your attorney applies them to your estate and your court.

Here are three hypothetical examples. None describes a real client or a real sale.

A buyer who signed at $2,000,000. A buyer reaches terms at $2,000,000 on an estate home in Franklin Hills. The representative holds limited authority, so the sale goes to a confirmation hearing. Another buyer who wants the home must offer at least $2,100,500 at the hearing. The original buyer walks in knowing that number.

An executor with full authority. A representative with full authority accepts an offer on a home in The Oaks. The Notice of Proposed Action states the price and the commission. It goes to each affected devisee at least 15 days before the sale date. No one objects in writing, so the sale proceeds without a confirmation hearing.

A buyer ready to overbid. A buyer follows a court-confirmed sale of a Laughlin Park home with an original bid of $3,500,000. The minimum overbid is $3,675,500. The buyer works out that number with their agent before the hearing and knows the court may still decline and order a new sale.

Rooster Homes is a Los Feliz, Los Angeles real estate team led by Brandon and Sarah Arlington (DRE #02051216). We handle probate and trust sales with the court's steps built into the plan. On a listing, the work starts the same day you sign, with escrow and disclosures moving within hours. You get a real, specific update after every showing and open house and a weekly progress update through closing. Our in-house Matterport 3D tour is part of the listing from day one.

Sellers can see each step in our listing process. Buyers can see how we prepare an offer in our buying process. When you are ready, contact Rooster Homes and let us know what works best for you. We will coordinate our schedule around yours.