Mr. Pedroza is partially correct, there are two instances I am aware of where court approval is not required to sell real property in California. No probate proceedings are required to sell real property if the real property is an asset wholly owned by a trust. However, in this case a filing often needs to be made with the county recorders office to remove the deceased’s name from the title so that a sale can occur.
With ONE exception, if the personal representative (executor) wishes to sell real property that is part of the probate estate, the property can ONLY be sold with Court approval and notice to those who have an interest in the property – and the sales price MUST be for at least 90% of the appraised value.
That ONE exception is where the personal representative has been given authority to act under the Independent Administration of Estates Act (IAEA), AND, the property is not being purchased by the personal representative or his/her attorney. In that situation the "at least 90%" rule and the requirement that the personal representative "obtain the highest and best price for the property reasonably attainable" do not apply . The request for authority under the IAEA may be made at any time, though this is usually done as part of the initial petition for probate. ANY interested party can object to the grant of authority, although the Court must grant the authority unless an objecting party can show good cause. If authority is granted, letters testamentary must also be obtained showing that authority. The judge must sign admitting the will and approving the letters testamentary. (Letters of Administration in some states).
With a sale of one to four units of owner-occupied property located in California where a loan secured by the property is in default, the sale agreement must comply with California’s relatively intricate pre-foreclosure sale statutes. To be safe, anyone indicated in any will as receiving an interest in the property, any surviving spouse and anyone receiving an interest under the intestacy laws (if there is no will) should be considered an owner.
In any case, the personal representative must give notice of the sale to all affected parties. The notice must include all material terms of the transaction, including the sales price and the amount of any commission. Notice need not be given if all interested parties sign a waiver of notice or a consent to the request for authority.
It is specifically because of the intricacies of the Notice requirements, and the ability of any interested party to object, that the question as to whether 'full authority' has been granted under IAEA and letters testamentary issued is so critical. It is common for a related personal representative to claim 'full authority' because it was granted solely within the verbiage of the will, which could lead the under-informed to assume that no court order is required. Unless the authority has been granted under IAEA, a court order MUST be obtained. Rather than go into all of this detail, I originally decided to answer your specific question regarding using the standard purchase agreement more succinctly presuming the common occurrence of assumed 'full authority,' because you had not mentioned letters testamentary or IAEA.
I stand by my original answer that because of the myriad pitfalls inherent in using a 'standard purchase agreement' for such a purchase, I strongly suggest you NOT use that agreement and instead seek affordable legal counsel. Not only can they include verbiage to protect your purchase transaction, they can also verify that proper procedures have been followed, proper Notices given, and letters testamentary have indeed been issued; which means that those with standing to object have been given their opportunity to do so, and either agreed to the sale, or their objections have been quashed.
I am perhaps more sensitive to the importance of using counsel whenever dealing with probate purchases because I lost significant capital on a $2.5 million purchase literally at closing when one of the previously unnamed beneficiaries served an injunction to stop the sale. This happened back when I was first starting out buying probate properties, and was in a state that does not have the 90% rule; the price was about 65% of appraisal value - a significant loss of profit and huge legal fees to correct. The seller thought she had 'full authority' to sell, and was as horrified as we were to have the sale reversed by the court. We were both even more horrified by the ensuing legal fees that it cost to extricate ourselves from the mess because of the unfounded allegations the 'injured party' levied against us.
"An ounce of prevention is worth (much more than) a pound of cure!" - Ben Franklin
