§1

What the Independent Administration of Estates Act is, and why it exists

Before the IAEA, a personal representative in California had to return to court for approval of essentially every meaningful act. That was slow, expensive, and paid for out of estates that usually had better uses for the money. The Independent Administration of Estates Act was designed to let a representative administer an estate with far less court supervision while preserving protections for the people who inherit.

For real estate, the practical effect is that California probate property sales now run on two very different tracks. On one, the representative sells much like an ordinary seller. On the other, the sale isn’t final until a judge confirms it in open court, and any qualified person may show up and outbid the buyer. Which track applies is not a strategic choice made by the seller or the agent — it follows from the authority the court granted.

Everything else on this page follows from that single fork.

§2

Reading the authority: full, limited, or none

The Letters issued to the personal representative state the authority granted. From a real estate standpoint there are three meaningful positions, and identifying which one applies is the first thing that should happen on any probate property file — before pricing, before preparation, certainly before an offer is accepted.

A fourth situation sits outside this diagram entirely: property held in a living trust and sold by a successor trustee. That is not a probate sale, involves no IAEA authority, no confirmation and no overbid. If that describes your situation, see Los Angeles trust real estate instead.

§3

Full authority in practice: close to conventional, with one added step

Under full authority the transaction behaves much like an ordinary residential sale. The representative can accept an offer and proceed; the buyer is the buyer; there is no courtroom and no competitive bidding after acceptance. Financing works normally, contingencies work normally, and escrow closes on the parties’ timeline.

The added step is the Notice of Proposed Action. Before taking certain actions — including selling real property — the representative gives advance written notice to the people entitled to receive it, generally at least fifteen days before the action. Those entitled may waive the notice, and in practice many estates obtain waivers from everyone early on, which removes the step altogether.

If someone entitled to notice objects within the period, the representative generally cannot take the action without going to the court. That possibility is worth building into an escrow timeline even where an objection seems unlikely, because a fifteen-day period discovered late is a fifteen-day delay.

What this means for marketing

• The listing is marketed to the full conventional buyer pool without special conditions.
• Buyers using ordinary financing are not disadvantaged and don’t need unusual preparation.
• The estate’s disclosure position still differs from an owner-occupant’s — see §8.
• Escrow should nonetheless be told early that this is a probate sale, so vesting, certified Letters and signature authority are handled from the outset.

§4

Limited authority and no authority: when confirmation enters the picture

Limited authority under the IAEA permits a representative to handle much of an administration independently but carves out certain acts — notably including the sale of real property — which still require the court’s confirmation. Estates administered without IAEA authority at all are supervised more closely still.

The practical consequence for the real estate transaction is significant and it is not merely procedural. Accepting an offer does not create a sale. It creates an opening bid that the court will review, that the public may learn about, and that another buyer may exceed in open court weeks later.

It also changes how buyers should be approached. A buyer who accepts an offer without understanding they may be outbid, or who assumes their financing contingency survives confirmation, will withdraw at exactly the wrong moment. Briefing agents and buyers accurately at the outset is not a courtesy; it protects the estate from losing weeks.

§5

The confirmation path, step by step

Where confirmation applies, the sequence between accepted offer and recorded deed generally runs as follows. Timing is typical rather than guaranteed and varies with the court’s calendar.

§6

The appraisal and the 90% rule

Probate estates have their assets appraised by a probate referee appointed to the estate, and real property values are reported on the Inventory and Appraisal. That figure does more than establish the beneficiaries’ cost basis: where confirmation applies, it constrains price.

As a general rule, a court-confirmed sale must be for at least 90% of the appraised value, and the appraisal generally must be no more than a year old at the time of sale. Both halves of that matter, and the second one is the one that surprises people.

• The floor can block a reasonable sale. If the referee’s figure was set in a stronger market or without accounting for condition, the market may simply not support 90% of it.
• The clock runs. An appraisal approaching its first anniversary can quietly become a problem in the middle of an otherwise healthy escrow.
• Condition matters to the gap. Referees value large volumes of property and may not have inspected the interior. A house with a failed roof and original systems can appraise well above what it will actually bring.

From the real estate side, the useful practice is to compare the referee’s figure against a current broker’s opinion of value early, and to watch the appraisal’s date as carefully as its amount. Where there is a material gap, that is a conversation for counsel — there are procedural avenues, and they take time that is better spent early than late.

§7

The overbid: how competitive bidding actually works

At the confirmation hearing the judge asks whether anyone present wishes to bid more than the accepted offer. If nobody does, the sale to the original buyer is confirmed and the matter is finished in a few minutes. If someone does, bidding opens in the courtroom.

California sets the minimum first overbid by formula: the accepted price plus ten percent of the first $10,000, plus five percent of everything above $10,000. After that first overbid, the judge sets the increments for continued bidding — commonly a round figure, and it varies by court and by property.

What a bidder has to bring

• Funds in the right form. A successful overbidder is typically required to hand over a deposit — commonly ten percent of the bid — by cashier’s check on the spot. A personal check or a promise to wire will not do.
• Presence, or a representative. Someone must be there to bid. Practices vary by court, so anyone planning to bid should confirm the requirements in advance.
• Readiness to close without contingencies. Confirmed sales generally close on the confirmed terms, without an inspection or loan contingency period.
• Acceptance of the existing terms. An overbidder takes the sale substantially as it stands. This is not an opportunity to renegotiate.

Commission when an overbidder wins

California has specific rules governing how compensation is handled on a court-confirmed sale. The court fixes the commission, and where a successful overbidder is brought by a different agent, statutory provisions govern how compensation is allocated between that agent and the one who procured the original bid. The allocation is not something the agents negotiate between themselves.

§8

What sellers should expect from the real estate side

§9

What buyers should expect

Probate property attracts buyers because it is often in original condition and priced accordingly. The trade-off is a process with different rules, and buyers who go in understanding them do considerably better than buyers who don’t.

Before you write an offer

• Ask which authority applies. Full authority means a conventional purchase. Confirmation means your accepted offer is an opening bid.
• Do your inspections early. On a confirmation sale, the practical window for investigation is before the hearing, because a confirmed sale generally closes without contingency periods.
• Have financing genuinely ready. Not pre-qualified — ready. A confirmed sale on a fixed timeline is unforgiving of a loan that needs another three weeks.
• Expect as-is. Repair requests are rarely entertained, and the estate frequently knows less about the property than an owner-occupant would.
• Budget for the deposit. Typically ten percent, and at a hearing it must be in the required form.

If you’re the accepted buyer and someone overbids

Your deposit is returned; you do not lose it by being outbid. What you lose is the time and the inspection costs you invested — which is precisely why you should know before you write the offer that this is possible, and decide whether you want to be in that position.

Some buyers attend the hearing prepared to continue bidding, having decided in advance what their ceiling is. That is a reasonable strategy. Deciding the ceiling in the room is not.

§10

Los Angeles County notes

Most Los Angeles County probate matters are heard at the Stanley Mosk Courthouse in downtown Los Angeles. Local calendar practice affects planning more than people expect: how far out hearings are set, how continuances are handled, and how a particular department runs its calendar all determine what an escrow timeline can realistically promise.

Beyond the court, Los Angeles County adds a layer of point-of-sale requirements that vary by jurisdiction and apply to estate sellers the same as anyone else. Within the City of Los Angeles that typically includes the Report of Residential Property Records, retrofit compliance for smoke and carbon monoxide alarms, water heater strapping and low-flow fixtures, and — on qualifying high-value transfers — the Measure ULA transfer tax, which should be modeled before pricing rather than discovered at closing. Pasadena, Long Beach, Santa Monica, Culver City, Glendale, Burbank and unincorporated county areas each maintain their own requirements.

These have lead times. On a confirmation sale, where the closing window after the order is short, starting them late is one of the more common avoidable causes of delay.