What is the court confirmation and overbid process when selling an inherited LA apartment building?

You accept an offer on the inherited building, escrow opens, everyone exhales — and then a stranger shows up at the courthouse, raises their hand, and buys it out from under your buyer for $20,000 more. That is not a horror story. In a probate sale that requires court confirmation, it is the design. The accepted offer is not the final price. It is the opening bid.

Whether your sale runs that way depends on one thing decided long before you ever list: the authority the court granted the estate's representative.

Full authority vs. court confirmation

When someone dies and their estate goes through probate, the court appoints an executor or administrator to act for it. That person is granted authority under California's Independent Administration of Estates Act — the IAEA. The grant comes in two flavors, and the difference decides everything about how the building sells.

Full authority. The representative can sell real property without going back to the judge for sign-off. They give a Notice of Proposed Action to the heirs, wait out the objection window, and close like a normal sale. No courtroom, no overbid, no auction.

Limited authority. The representative can negotiate and accept an offer, but the sale is not final until a judge confirms it in open court. That hearing is where the overbid happens.

You can have limited authority for reasons that have nothing to do with you — an heir contested the petition, the will was silent, the court was cautious. Many inherited LA buildings sell under full authority and never touch a courtroom. The ones that don't are the ones that surprise sellers. The first question to ask the estate attorney is which authority the letters grant. Everything below only matters if the answer is limited.

The 90% rule: why your accepted offer can't be a lowball

Before a confirmation sale even reaches the hearing, the offer has to clear a statutory floor. California Probate Code requires the accepted bid to be at least 90% of the property's probate appraised value — the value set by the court-appointed probate referee.

This is where the appraisal stops being a tax formality and starts steering the sale. The referee's number sets the gate. Price the building loosely against it and the court won't confirm. Price it well and you've built a floor under the auction. A sober, defensible probate appraisal is one of the few levers an executor actually controls before the gavel comes down — which is the same reason getting the inherited building priced correctly matters more here than in an ordinary sale.

The overbid auction: how the courthouse-steps math works

The accepted offer gets noticed up for a confirmation hearing. Any qualified buyer can appear and bid higher. To open the bidding, the law sets the first overbid by formula — not by whim — so nobody can top the deal by a single dollar.

The minimum first overbid is the accepted price plus 10% of the first $10,000, plus 5% of the balance above $10,000.

Run it on a real number. Accepted offer of $2,000,000. Ten percent of the first $10,000 is $1,000. Five percent of the remaining $1,990,000 is $99,500. The first overbid must be at least $2,100,500. From there the judge takes bids in increments the court sets, live, until no one raises a hand. The high bid that survives is the sale the court confirms.

Your original buyer can bid too. Sometimes they win and pay more than they wanted. Sometimes they walk, and a buyer who never saw the inside of the building owns it.

What the uncertainty actually costs — and who absorbs it

Here is the part the brochures skip. The overbid is not free money for the estate. It is a risk transfer, and most of it lands on the buyer.

A buyer in a confirmation sale spends real money on inspections, financing, and lawyers for a building they might lose at a hearing to someone who spent nothing. Sophisticated buyers know this. So they do one of two things: they discount their opening offer to price in the risk, or they skip your deal entirely. That is the quiet tax of a confirmation sale — it thins your buyer pool and softens your opening bid precisely when you need depth and tension most.

The overbid is supposed to win that back at the hearing. Sometimes it does. Sometimes one motivated bidder shows up and the price jumps. And sometimes the hearing is silent, the original buyer closes at their already-discounted number, and the estate clears less than a full-authority sale of the same building would have.

Why this changes how an executor picks a broker

In a normal sale, the broker's job ends when the offer is accepted. In a confirmation sale, that is when the hard part starts. The accepted offer is bait — the entire strategy is engineering a crowded hearing, because an overbid auction with one bidder is just a discount with extra steps.

That takes a specific kind of work: marketing the property to the day of the hearing instead of stopping at escrow, lining up backup bidders who understand the overbid formula, and walking a nervous executor through a courtroom most have never seen. A broker who has actually run overbid auctions prepares for the hearing the way a litigator prepares for trial. One who hasn't treats the accepted offer as the finish line and lets the room go quiet. The first question to ask any broker you interview is simple: how many court-confirmation sales have you closed, and how many drew a real overbid?

The same instinct that makes some executors want to move the inherited building fast can quietly leave money on the courthouse floor here — speed and a packed hearing are not always the same goal, and knowing which one you're optimizing for is the whole game.

Request a free evaluation — including a candid read on whether your estate's authority puts you in a confirmation sale, and how we'd build the hearing if it does →