The 90% Rule: What Every Executor Needs to Know About Selling Probate Property in California

One of the most misunderstood aspects of California probate real estate is the 90% rule — a statutory requirement that directly affects how estate properties are priced, marketed, and sold. For executors and administrators navigating a property sale in San Francisco or Marin County, understanding this rule is not optional. Violating it can result in personal liability, court sanctions, and a sale that must be unwound at significant cost to the estate.

What the 90% Rule Actually Says

California Probate Code §10309 requires that when an estate property is sold through the court confirmation process, the sale price must be at least 90% of the property's appraised value as determined by the court-appointed probate referee. The appraisal must have been completed within one year of the proposed sale date.

This means that if the probate referee appraised an estate home in Pacific Heights at $2,000,000, the minimum acceptable sale price at a court confirmation hearing is $1,800,000. A buyer who submits an offer below that threshold cannot have their sale confirmed by the court, regardless of market conditions or the executor's willingness to accept.

When Does the 90% Rule Apply?

The 90% rule applies specifically to sales that require court confirmation — meaning sales conducted without full Independent Administration of Estates Act (IAEA) authority. If the executor has been granted full IAEA authority by the court, they can sell estate property without court confirmation, and the 90% rule does not apply in the same mandatory sense. However, even with IAEA authority, the executor still has a fiduciary duty to obtain fair market value for the estate.

In practice, the distinction matters enormously. Executors with full IAEA authority can negotiate and close a sale much like a standard real estate transaction — accepting the best offer, negotiating terms, and closing without returning to court. Executors without IAEA authority must follow a more complex process that includes the 90% floor, public notice of the proposed sale, and a court confirmation hearing where overbidding is permitted.

How Court Confirmation and Overbidding Work

When a sale requires court confirmation, the process unfolds in a specific sequence that every executor and real estate agent involved must understand.

First, the executor accepts an offer from a buyer — but this acceptance is conditional, subject to court confirmation. The accepted offer price must meet the 90% threshold. The executor then files a Report of Sale and Petition for Order Confirming Sale of Real Property with the court, which schedules a confirmation hearing typically four to six weeks out.

Before the hearing, notice of the proposed sale must be published, alerting other potential buyers that the property is available and that overbidding will be permitted at the hearing. This is not a theoretical possibility — overbidding is common for desirable San Francisco and Marin County properties, and buyers who lose out to overbidders at confirmation hearings are a regular occurrence.

At the confirmation hearing, any member of the public can appear and submit an overbid. The minimum overbid is typically the accepted offer price plus at least $5,000 plus 10% of the accepted price (though courts have some discretion). If a higher bid is submitted and accepted, the original buyer loses the property — and their deposit is returned. The estate benefits from the higher price, which is the purpose of the overbidding process.

Strategic Implications for Pricing and Marketing

The 90% rule and the overbidding process create a unique strategic dynamic for probate property sales in San Francisco. Because the accepted offer is not final until court confirmation, and because overbidding can occur at the hearing, the initial accepted offer price is less critical than in a standard sale. What matters most is attracting a serious initial buyer willing to wait for court confirmation — and pricing the property attractively enough to generate interest while meeting the 90% floor.

Experienced probate real estate specialists use this dynamic strategically. Pricing an estate property slightly below market value can generate multiple offers and competitive interest, while still meeting the 90% threshold. The resulting overbidding at the confirmation hearing often produces a final sale price at or above what a standard listing would achieve — benefiting the estate and its beneficiaries.

Common Mistakes to Avoid

The most common mistake executors make is accepting an offer that appears to meet the 90% threshold based on an outdated appraisal. If the probate referee's appraisal is more than one year old at the time of the proposed sale, a new appraisal is required. In San Francisco's volatile market, a one-year-old appraisal can be significantly below current market value — meaning the 90% floor based on that appraisal is actually well below what the property could reasonably achieve.

A second common mistake is failing to account for the time required for court confirmation when negotiating with buyers. Buyers who are unfamiliar with probate sales sometimes walk away when they learn the sale is subject to court confirmation and potential overbidding. Working with a Certified Probate & Trust Specialist who can clearly explain the process to buyers — and who has experience managing the confirmation hearing — is essential to keeping transactions together.

If you are preparing to sell estate property in San Francisco or Marin County, a free property valuation from a specialist who understands both the probate process and the local market is the most important first step you can take.