What's a probate sale???
Have you ever seen a listing that says it's a "probate" sale? Or a conservatorship with "court confirmation?" Well, I'd like to explain what these are. We currently have two of them, one on Cortland in Bernal Heights and one on Quesada in Bayview. They're both priced at $399,000 and they both will go through two rounds of bids.
A probate sale occurs when an owner dies and didn't have a will. A conservatorship happens when an owner is unfit to manage his/her own affairs and a conservator is appointed to manage the sale of their property. If they determine that the sale requires court confirmation then they will go through the 2-bid process. The first round will set the price for the second round.
So, for example, if the list price is $399,000 and several offers come in, the high offer will set the price for the second round. In the first round, the offers are treated just as they are on a normal sale. Say the high offer in this example is $420,000. This will be noted on the MLS and then a court day will be set, usually 3-4 weeks after the initial offer. In court, there will be an auction. The first bid in the auction will be 5% higher than the initial high bid. So in this example, $420,000 plus 5% = $441,000. If no one bids, then the initial offer will win and get the property at $420,000. If people bid, then it goes to the high offer, and this is an open auction. Everyone in attendance will hear exactly what happens. The bid wins the property and at this point, there's no backing out, so it's prudent to do all inspections before going to court. You'll also need a cashier's check for 10% of the maximum amount that you want to bid. If you don't go to your maximum, you can get the remainder back in escrow. Call me if you'd like to see either of these properties or if you have any questions about the process.