pointmentAsk Phyllis: a blog series of frequently asked real estate questions.
Probate with Court Confirmation,
Dear Phyllis,
I have been a fan of your real estate advice for years. My late brother never had a trust or will and was a hoarder. The court appointed me, and I have been tasked with managing the sale of his Canoga Park home. I spent months reviewing the contents, verifying that we wouldn’t discard anything valuable. I listed the home with a local Realtor who conveniently lives in the neighborhood. His home is in dire need of repair, and many things are not functioning properly, including the heater and stove. The attorney I hired set the probate up, requiring court confirmation. It’s been two months, and we have not received even one offer.
My Realtor claims that requiring a ten percent escrow deposit is scaring away investors. He explained that investors avoid tying up this much money while waiting for probate court to confirm a sale—or worse, risk being outbid. He added that the escrow deposit could easily remain tied up for three months. Do you think this could be the reason the home is not selling?
Mark
Dear Mark,
Yes, the 10% escrow deposit could absolutely be a major reason the home isn’t getting offers, especially in a court-confirmation probate sale. Most investors want to move quickly. Probate sales with court confirmation are slow and uncertain. Investors don’t like tying up large sums—like a 10% deposit—for months without a guaranteed sale.
Even if an investor opens escrow, someone else can show up at the court hearing and outbid them. In that case, the original buyer gets their deposit back—but their money was tied up for months while missing other investment opportunities.
You mentioned the home is a major fixer-upper with non-working systems. This already limits your buyer pool to mostly cash investors. Adding a high deposit and a long, risky process makes it even less appealing.
To improve your chances, ask the attorney if you can avoid court confirmation. If not, you may be able to switch to the Independent Administration of Estates Act (IAEA), which allows the sale to proceed without court delays and provides you with more flexibility. Also, consider lowering the escrow deposit requirement. While experts may recommend a 10% deposit, the court does not require it. Reducing it to a more common 3% could make the property more appealing to investors who are currently hesitant to tie up large amounts of money.
Best of luck to you on a speedy sale and closing.
