There were no probate sales over bidders at two court confirmations Thursday, 11/3/11 at the Berkeley Superior Court of Alameda, 2120 Martin Luther King Jr. Way. One thing I tell buyers is that someone can show up at the court and over bid, one of the problems with probate court confirmation sales. But nobody showed up.

I had a small property, listed at $75,000. The Attorney was Richard Karlsson, Interim County Counsel. One of his assistants took care of the matter. It was confirmed by the the Hon. William McKinstry at $68,500, within the 90% minimum requirement.

The overbid formula was a) Original bid $68,500 + b) 10% first $10,000 of original bid $1,000 + c) 5% of (original bid - $10,000) $2,925,00 = a+b+c= $72,425.

The good news for me was that I also had the buyer. Both seller and buyer were happy with the sale.

Both sales were confirmed without muss or fuss. Neither the representatives for the seller nor the buyers showed up. I was there just in case something came up. The attorney got up and announced the sale of real property and asked if anyone wanted to bid. Silent reply. CONFIRMED.

The responsibility to make sure deal closed transferred to the buyer.

A buyer I’m working with was asking me if the market was still declining or not. Here’s my take: sellers can’t help themselves and prefer to start high; the house is not in a good area; the house needs a lot of work; and the house is dirty. Guess what happens. The market rejects it, month after month, and the seller is then forced to lower the price. The market then interprets that as: prices are going down.

If sellers would place a realistic price on the house, it would sell and the market would interpret that as: price stabilization. What are the odds of sellers doing that? None. Sellers, whether they be regular homeowners, agencies, organizations, or realtors, do what is humanly natural: they want to start high. (Greed, righteousness, fear, and distrust all put together pop into their minds.) And there is nothing that can convince them to do otherwise. When you sell your house I bet you, you will want to start high, right? A few sellers are realistic and they sell their houses right away AT fair market value.

All of that to get to this--is it a good time to buy? Yes. Look at the stats provided by Fannie Mae:

1. 69% of renters say owning a home makes more sense than renting
2. 61% of renters think home ownership is a safe investment
3. 72% of renters feel home ownership is good for the economy
4. 38% of renters indicate they are likely to buy a house in the next three years
5. 16% of current homeowners are likely to buy a house in the next three years

Despite all the foreclosure problems we’ve been having, we’re seeing good sales activity because of low prices and interest rates. In many metro areas, it’s cheaper to own than to rent.

Whether you’re buying to live or invest, it’s a good time to buy.

A buyer asked me what was the main difference about a probate sale (with court confirmation) than other sales.

These are the main differences

1. 10% down (unless otherwise stated)
2. Offer must be 90% of the appraised value
3. No contingencies. As-Is.
4. No backing out.
   
5. More complicated. More players, that is, lawyers and a court.
   
6. Can be out bid in court

For these reasons I don't recommend probate sales with court confirmation to first time home buyers. There's a chance that the bank denies the loan late in the deal and their earnest money deposit may be lost, or someone out bids them in court.

I explained that this sale is better for savvy buyers with cash.

I did a Sunday Open House at 2501 E 28th St. in Oakland, CA 94601. It was a nice house. A 970 sq. ft., starter home, which would be perfect for a couple and child. It was a 3 bed, 1 bath, with a fireplace, front yard, and detached garage. See attached photo. Listed at $199,500.

There are deals in probate sales. Want to invest in this type of property? Let me know. Have a house to sell? I can help too.

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If the probate sale is with court confirmation it may or may not need the 10% deposit with the offer. Again, ask the listing agent. If it's not court confirmation (independent administrator) then it's a regular sale, no 10% deposit needed.

Had to clear that up.

We are looking at a couple properties listed as probate sales. We were told by our real estate agent that we should come up with 10% to purchase a probate. I pressed for what this meant but the agent was not clear. Question: "Do I NEED to come down with 10%?"

Answer: Yes and No. Yes, some institutions and situations do require a 10% deposit with the offer. On the other hand, there are some probate sales that don't, and will go with any amount as in a regular sale. I have been involved in both types. So how do you know if there is a 10% requirement? You ask the listing agent.

Hope this helps. Good luck.