California has two ways to probate an estate. One is the long time Court Confirmed Sale process which one of the requirements is a 10% deposit made at the time of your offer. You are not even in escrow yet but you must submit the 10%. Think about it on a $300K sale this is $30K and today agents accept from 1 to 3% of the offer price as depsosit so the 10% is outrageous.
Yes, I understand it's only a deposit but if you represent investors like I do and your making multiple offers than the 10% deposits are going to add up and it's a process to get them back from the attorney or escrow if your deal does not make it. If you represent retail buyers than the 10% could be a hardship if they are a VA, FHA (3.5%) or a Conventional (3,5 or 10% down) buyer. Most of the time they don't have the 10% upfront anyway so what happens in the real world of Probate Homes is these buyers bypass the property which it turn hurts the estate as the retail, move in buyers pay the most.
Now most of you probably have heard of the I.A.E.A by now and understand if the PR receives approval as Executor or Administrator with Full Powers the sale does not have to go to court or meet any of the crazy requirements of the court confirmed sale. The problem is from time to time you will run up against an old school attorney who wants the 10% even though it's not required. You have to know how to handle this or you are going to become frustrated as this will probably be your first probate sale situation (ha!) and then you will leave the probate niche. DON"T LET THIS HAPPEN...
If the attorney insists on the 10% even though it's not needed under the I.A.E.A this is what you do.
1. First option is to explain to the attorney under the I.A.E.A it's not required, send the legal definition and ask the attorney to accept the normal 1 to 3% deposits.
2. If this doesn't work tell the attorney your client will place $1K in escrow now and the remainder of the 10% deposits will be made 1 day after buyer removes inspection contingencies. This usually will work.
3. If all else fails have your (you should have one) estate attorney like I do who also works with my DF students and have he/she call the estate attorney for you and work it out within the Good Old Boy's system.
This should help you avoid the 10% deposit issues when and if it comes up which will arise if you are doing 2-4 probates per month like I do. It's just business.
FREE WEBINAR: I'm holding a Webinar this Tuesday (1/6 pst) @ 7pm where I will explain HOW I EARN 5 DIFFERENT WAYS WITH PROBATE HOMES...and I invite you to sit in and listen to what I do as you may find it of more interest. Just go to my site: www.dfprobatesystem.com and register for the Free Booklet which is a preview of my Tuesday Webinar. You will be sent the link for Tuesday nights webinar Tuesday afternoon.
You can also go to this link below and register:
| Gary DiGrazia has invited you to the following meeting : | |||
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If you can't make it but want to chat more about probate real estate in your business call me office 510-278-2017 from 9am to 7pm) Mon to Thur or Sat 10am
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