Probate Broker vs. a “We Buy Houses” Cash Offer: Which Nets the Estate More?
Selling an inherited Los Angeles home? Compare a probate broker with a 'we buy houses' cash offer, and see who has a duty to get the estate top dollar.
Short answer: If you are an executor, administrator or trustee holding a “we buy houses” cash offer, put the house on the open market before you sign anything. The more buyers who see a home, the higher the price, and cash buyers are part of that market. Any real estate agent can bring you cash offers. The difference is that your listing broker owes you a fiduciary duty to get top dollar, while an investor’s job is to buy as cheaply as possible.
I’m Bill Gross, The LA Probate Expert. I have been licensed since 1989 and a broker since 2005, and I sell probate and trust real estate for executors, administrators, trustees and estate attorneys in Los Angeles County. Here is how I explain this choice to families.
Probate broker vs. cash-for-homes offer: side by side
| Probate broker (open market) | “We buy houses” cash offer | |
|---|---|---|
| Who sees the house | Every agent and buyer on the MLS, including cash buyers and investors | One company, or the investor it refers your lead to |
| How the price is set | Buyers compete on price and terms | The buyer sets its own price |
| Cash offers | Yes. Every agent can bring cash offers | Yes, from one buyer |
| Whose side they’re on | Fiduciary duty to the seller to get TOP dollar | Buyer’s goal is to buy cheaply and maximize profit |
| Court confirmation | Limited authority: IS required. Full authority: MAY BE required | Same rules apply; a cash buyer can be overbid at the hearing |
| Speed | Set by the marketing period and, if needed, the court calendar | Can be fast, at the price of less competition |
1. The more people who see a home, the higher the price
Price comes from competition. A house listed on the MLS is seen by every agent and every buyer searching in that area: families, contractors, investors and cash buyers. A cash-for-homes offer is one buyer, setting its own price, with no one bidding against it.
When several buyers want the same house, they compete on price and terms. That competition is what gets an estate home to its real market value. It is also what protects the personal representative, because the heirs can see the house was offered to everyone.
2. Every real estate agent can bring cash offers
A cash offer is not something only a “we buy houses” company can give you. Every real estate agent can bring cash offers. When I list an estate home, cash buyers and investors are part of the buyer pool. If the house needs work, I say so in the listing and market it as-is, so investors and contractors compete alongside owner-occupants.
So the real choice is not cash vs. no cash. It is one cash buyer setting the price vs. the whole market, cash buyers included, competing for the house.
3. Most “cash for homes” companies are marketing companies
In my experience, most companies advertising cash for homes are really marketing companies. The signs, postcards and online ads collect the lead. Then they refer that lead to a local investor, or put the house under contract and assign the contract to someone else.
Every handoff in that chain gets paid, and the money comes out of the price the estate receives. Before you sign, ask three questions:
- Who is the actual buyer, and are they buying with their own funds?
- Can the contract be assigned to someone else?
- Is there a deposit, and how much?
4. Any agent can get you offers. Your broker’s duty is TOP dollar
Any agent can get one offer, or several. What matters is whose side they are on. As your listing broker, I owe the seller a fiduciary duty to get TOP dollar for the estate. An investor buying your house has the opposite job: buy on the cheap to maximize profit. Both can be honest. Only one of them works for the estate.
That matters even more in a probate or trust sale, because the executor, administrator or trustee also owes duties to the heirs and creditors. Selling to the first cash buyer without testing the market can lead to objections from heirs. Talk with the estate attorney before you sign any offer.
Does a cash buyer avoid court confirmation?
No. The buyer does not decide whether the court gets involved; the personal representative’s authority does.
- Limited authority under the Independent Administration of Estates Act (IAEA): court confirmation IS required.
- Full IAEA authority: court confirmation MAY BE required, for example if someone objects to the Notice of Proposed Action.
In a confirmation hearing, any buyer, cash or financed, can be overbid. The first overbid is the contract price plus 5% plus $500, and each bidder brings a cashier’s check for 10% of the bid, payable to the estate. For example, on an $800,000 accepted offer, the first overbid is $840,500, with an $84,050 cashier’s check. A low private cash offer can be overbid in open court, so it pays to market the house properly from the start.
When a cash offer can make sense
Sometimes speed or certainty matters more than price. A cash sale can be the right call. The way to know the price is fair is to let the market compete first, then take the best cash offer from that pool, with the estate attorney’s review.
Frequently asked questions
Can a real estate agent get me a cash offer on an inherited house?
Yes. Every real estate agent can bring cash offers. When I list an estate home on the open market, cash buyers and investors see it along with owner-occupants, so the estate can take a cash offer and still have the whole market competing for it.
Is a “we buy houses” company the actual buyer?
Often not. In my experience, most companies that advertise cash for homes are really marketing companies. They collect the lead and refer it to a local investor, or tie the house up under contract and assign it, and someone in that chain is paid out of the estate’s price.
Does a probate sale to a cash buyer avoid court confirmation?
No. Who the buyer is doesn’t decide it; the personal representative’s authority does. With limited IAEA authority, court confirmation IS required. With full IAEA authority, court confirmation MAY BE required, for example if someone objects to the Notice of Proposed Action. In a confirmation hearing, any buyer, cash or financed, can be overbid.
Who has a duty to get the estate the highest price?
The listing broker owes a fiduciary duty to the seller, which means working to get top dollar for the estate. An investor buying the house has the opposite goal: buy as cheaply as possible to maximize profit. The personal representative also owes duties to the heirs and creditors, so the estate attorney should review any offer before it is signed.
When can a fast cash sale make sense?
When speed or certainty matters more than price, a cash offer can be the right choice. The way to know it is a fair price is to let the market compete for the house first, then take the best cash offer from that pool.
Related: Probate-focused broker vs. traditional Realtor® · How to choose a probate real estate agent: 10 questions · How a court-confirmed sale works in Los Angeles
About the author. Bill Gross, The LA Probate Expert, brokered by eXp Realty. Licensed since 1989, broker since 2005. Probate & Trust Real Estate Broker for executors, administrators, trustees and estate attorneys in Los Angeles County. Host of Probate Weekly, The Estate Planning Podcast and The Reverse Mortgage Podcast.
DRE #01022275. Brokerage: eXp Realty of California, Inc., DRE #01878277. 8383 Wilshire Blvd #800, Beverly Hills, CA 90211 · (310) 210-0008. Bill is a real estate broker, not an attorney and not a probate referee.
Educational only, not legal advice. California probate and trust administration are fact-specific. Confirm authority, court requirements and tax consequences with the estate’s attorney and tax advisor.