What steps do I need to follow as executor to sell real property to pay estate debts? (CA) | California Probate | FastCounsel
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What steps do I need to follow as executor to sell real property to pay estate debts? (CA)

August 8, 2025 7 min read

Quick scenario

Hypothetical: You have been appointed the executor (personal representative) for a California estate. The estate owns a house but has little or no cash. Creditors are owed money. You need to sell the house to pay the estate’s debts. Below is a step‑by‑step FAQ style guide to what you’ll typically need to do under California law.

Detailed Answer — step‑by‑step process for selling estate real property in California

  1. Confirm your role and authority. Before you can sell estate property you generally must have legal authority as the estate’s personal representative. That authority comes either from a will that grants power to the personal representative (and the estate is being administered independently), or from letters testamentary or letters of administration issued by the probate court. If you do not yet have letters, petition the court for appointment. See the California Probate Code and the California Courts probate self‑help pages for appointment procedures: California Probate Code (Legislative Information) and California Courts — Probate Self‑Help.
  2. Determine whether probate is required and which process applies. If the decedent’s assets pass entirely outside probate (e.g., joint tenancy, living trust, small estate procedures), you may not need to use the probate sale process. If the property is part of probate assets you will use probate procedures. California offers two common routes to sell: (A) Independent administration (no routine court approval if the will and/or court grants power to sell), or (B) Court‑supervised sale (you petition the court for authority and confirmation). Whether you qualify for independent administration depends on the will and court order. See general Probate Code materials: Probate Code (CA).
  3. Inventory, appraise and secure the property. As personal representative you must identify and protect estate assets. Have the property inspected and obtain a market analysis or a professional appraisal. If the estate lacks cash to maintain the property, secure the property (locks, insurance, utilities) and get estimates for repairs/maintenance so buyers are not surprised and the value is preserved.
  4. Notify creditors and follow creditor claim rules. You must give notice to known creditors and usually publish a Notice to Creditors. Creditors have limited time to file claims against the estate; you must follow the statutory notice and claims procedures before distributing funds. Do not distribute sale proceeds to beneficiaries until known valid creditor claims are resolved. See California Courts resources and the Probate Code for creditor notice requirements: CA Courts — Probate and the Probate Code index at leginfo.legislature.ca.gov.
  5. Decide whether the sale can proceed without court confirmation. If the will and court order grant independent authority to sell, you can list and sell the property through normal real estate procedures (with certain required notices to interested persons). If the estate is being supervised by the court or the will does not give power to sell, you must petition the probate court for an order authorizing the sale and for confirmation of sale terms. In court‑supervised sales, the court typically requires a petition describing the property, sale terms, any liens, the proposed buyer (if any), and a proposed order. Use the Judicial Council probate forms and local rules; the court will set a hearing and require notice to interested persons. See the California Courts forms index: Probate forms — Judicial Council.
  6. If a court sale is required: file a petition to sell. Typical petition contents: legal description of the property; estimated value; listing broker and terms; whether sale is to an interested person (special rules apply); proposed disposition of sale proceeds (to pay debts, taxes, expenses); and proposed buyer if under negotiated sale. The court will set a hearing and may require publication and mailed notice to heirs and creditors. After the hearing, if the court approves, it will issue an order authorizing sale and either allow sale at market terms or require court confirmation after sale (depending on the circumstances).
  7. Handle liens, mortgages and payoff statements. Before sale you must determine any encumbrances (mortgages, liens, tax liens). Obtain payoff statements and resolve or provide for lien payoffs in escrow. Creditors with recorded liens typically get paid from sale proceeds according to priority.
  8. List the property and accept an offer. Use a licensed real estate broker or market directly (if permitted). If you have independent authority, proceed like a normal sale but be prepared to provide a copy of your letters and any court orders to escrow/title. If you have a court order authorizing sale, include a copy of that order in escrow so title company and buyer know the sale is valid.
  9. If court confirmation is required, obtain confirmation and clear title. Some probate sales (especially sales to interested persons or sales under court supervision) require court confirmation after acceptance of an offer. The court will hold a confirmation hearing (often called an overbidding or confirmation hearing). After confirmation, the court signs the order confirming sale and authorizes transfer and distribution of proceeds. Follow the court’s procedures exactly and serve required notices to creditors and heirs.
  10. Close escrow, pay debts, file accounting, and distribute remaining proceeds. After sale, escrow closes, liens and valid creditor claims are paid from proceeds (including estate administration expenses and commissions), and you file a final (or partial) accounting with the court if probate is supervised. After court approval (where required) pay valid claims and distribute any residual to beneficiaries under the will or intestate succession rules.

Key legal and practical details to watch

  • Priority of creditors and lienholders: secured creditors recorded against the property are usually paid first from sale proceeds.
  • Taxes: estate may owe federal or state taxes; check with tax counsel or accountant and reserve funds if necessary.
  • Buyer due diligence: buyers will want clear title; resolve title exceptions promptly.
  • Timeline: creditor claim deadlines and required notices create minimum waiting periods before final distribution; don’t rush to disburse funds.
  • Conflicts of interest and interested‑person sales: sales to heirs, beneficiaries, or to the personal representative typically require extra notice and often court approval.

Statutory resources and forms: General references for California probate law and forms are the California Legislative Information site (Probate Code index) at https://leginfo.legislature.ca.gov/faces/codes.xhtml?lawCode=PROB, the California Courts probate self‑help pages (https://www.courts.ca.gov/selfhelp-probate.htm), and the Judicial Council forms index for probate (https://www.courts.ca.gov/forms.htm?filter=probate). These resources list specific Probate Code sections, creditor notice rules, appointment procedures, and the forms commonly used when selling estate property.

Final note: Probate sales involve both procedural and substantive legal rules (creditor deadlines, notice requirements, court hearings). Small mistakes can delay closing or expose you to personal liability if you distribute funds prematurely.

Disclaimer: I am not a lawyer. This information is educational only and is not legal advice. For specific legal advice about your situation, consult a California probate attorney before acting.

Helpful Hints

  • Get copies of the death certificate and the original will (if any) right away.
  • Obtain a lender payoff statement and any lien information early in the process.
  • Keep detailed records and receipts for all estate expenses — you will need them for court accounting and to document proper use of estate funds.
  • Do not distribute sale proceeds until creditor claims and court requirements are satisfied.
  • Consider hiring a probate attorney for court‑supervised sales or when creditors and interested parties may contest the sale.
  • Use a title company experienced with probate sales to avoid closing delays.
  • Ask the court clerk what local rules or local forms your county requires — probate procedures vary by county.

The information on this site is for general informational purposes only, may be outdated, and is not legal advice; do not rely on it without consulting your own attorney.