What is a Trustee Sale Requiring Court Approval?
Occasionally, you may come across a property listed for sale that is a trustee sale requiring court approval. The term “trustee sale” can be a bit confusing since the same phrase “trustee’s sale” is used when a Trustee sells a property in foreclosure. In today’s context, trustee’s sale refers to a Probate sale conducted by a Judge at the Superior Court in the County where the property is located.
What Does this Mean?
When a trustee sale (Probate) requires court approval, the court has final say in who will purchase the property. Offers are submitted to the estate for primary acceptance by the heirs. When the heirs accept the offer, it is submitted to superior court for confirmation (approval). The buyer will then be asked to perform all of their inspections and appraisals at the buyer’s expense. Once all of the buyer’s contingencies have been waived, a court date will be set and at that time a Judge will call for overbids from the public.
How does the Overbid work?
The Court has a formula for overbids, which means the overbid must be an incremental percentage over the contract price. They will not sell the property to another person if they bid $1 over the contract price. The overbid must meet the minimum formula established by the Court.
What Happens if the Court Accepts an Overbid?
If the Superior Court judge accepts an overbid, the buyer will lose the money they paid for the inspections and appraisals. The Superior Court judge has the power to sell the property to someone else, even though the buyer has a purchase contract because a Superior Court must approve the sale. If this happens, you will lose the money you paid for inspectors and appraisals and you will have to find another home.
Why Would a Home Be Required to Have Court Confirmation?
When someone dies intestate (without a will), or if their assets are subject to probate, typically the sale of their home will require a court approved trustee sale to distribute the assets to their heirs.
What If I Don’t Want to Buy the Property After the Court Confirms the Sale?
Once you remove your contingencies (which are the buyer’s legal right to cancel the contract without penalty), you no longer have a legal right to cancel without penalty. Contingencies are removed by the buyer before the sale is heard by a Superior Court, so if you choose not to buy the property after the court confirms your sale, you will forfeit your deposit money, which is typically 3% of the purchase price.
Should I Get Involved in a Trustee Sale?
Buyers need to be aware of the risks of getting involved with a trustee sale and decide if these conditions are something they are willing to follow.
How Can I Search for Homes Available Today?
Visit our sister site, www.SanMateoHomesInfo.com for a complete list of all the properties for sale in San Mateo and Santa Clara Counties.
Other Posts You May Enjoy
- What is Dual Agency?
- Paying More than $1,600 in Rent? You Could Own in 2009!
- Why are REOs Better than Short Sales?
- What Seller Concessions Should Buyers Request?
- Q&A: Exercising Due Diligence
If you have enjoyed LivingWellinSanMateo – san mateo county real estate, please subscribe to our RSS feed.
Raymond Stoklosa, Broker/Co-Owner
Chela Stoklosa, Realtor/Co-Owner
