The 90% Rule in a California Probate Sale, Explained
Fiduciaries hear about "the 90% rule" from agents, buyers, and other beneficiaries, usually in garbled form. It is a real statutory floor, it is narrower than most people think, and it is measured against a specific number that the fiduciary does not get to choose.
What does Probate Code section 10309 actually say?
Section 10309(a) sets three conditions that must all be satisfied before the court confirms a private sale of estate real property:
- the real property has been appraised within one year prior to the date of the confirmation hearing;
- the valuation date used in that appraisal is within one year prior to the confirmation hearing; and
- the sum offered for the property is at least 90 percent of the appraised value determined by that appraisal.
Note the two separate one-year tests. An appraisal performed recently but valued as of a date eighteen months ago does not satisfy the statute on its face. That is a technical point worth raising with the estate's attorney early, because it can force a reappraisal at exactly the moment everyone wants to close.
Does the 90% rule apply to every inherited house?
No, and this is the most common misconception. Probate Code section 10503 says that when a personal representative sells estate property under Independent Administration of Estates Act authority, the requirements applicable to court confirmation of real property sales do not apply to the sale — and the statute expressly names "sale at not less than 90 percent of appraised value" as one of those requirements, along with publication of notice of sale and court approval of brokers' commissions.
So a full-authority sale is generally not governed by the 90% floor. Neither is a sale by a successor trustee of a living trust, which is not a probate sale at all. That does not mean price is unconstrained — a fiduciary still owes duties to the estate or the beneficiaries — but the specific statutory 90% test is not the measuring stick.
| Sale type | § 10309 90% floor |
|---|---|
| Probate sale requiring court confirmation (no IAEA authority) | Applies |
| Probate sale by a representative with limited authority | Applies (court supervision required under § 10501(b)) |
| Probate sale under full IAEA authority | Generally does not apply (§ 10503) |
| Sale by successor trustee of a living trust | Does not apply — not a probate sale |
Which appraisal is the 90% measured against?
The appraisal used in the estate proceeding. In most California probate estates that value is set by a probate referee and reported on the Inventory and Appraisal filed with the court. It is not the buyer's lender appraisal, not a Zestimate, and not the listing broker's opinion of value.
This matters because the referee's date of value is generally the date of death, while the market moves. In a falling market a year-old date-of-death value can sit well above what buyers will pay, and the 90% floor can become a real obstacle rather than a formality. In a rising market the opposite happens and the floor is irrelevant.
| Appraised value in the estate | 90% floor | Largest discount the court can confirm |
|---|---|---|
| $750,000 | $675,000 | $75,000 |
| $1,000,000 | $900,000 | $100,000 |
| $1,400,000 | $1,260,000 | $140,000 |
| $2,250,000 | $2,025,000 | $225,000 |
What if the appraised value is stale, too high, or too low?
Section 10309(b) allows a further appraisal at any time before the sale or the confirmation of sale in four situations: the property was never appraised; it was not appraised within one year before the confirmation hearing; the valuation date in the latest appraisal is more than one year before the hearing; or the court is satisfied that the latest appraisal is too high or too low.
Section 10309(c) addresses who performs the new appraisal. If the original appraisal was made by a probate referee, the same referee may make the new appraisal without a further court order; a different referee is appointed if the original one has died, been removed, or is otherwise unable to act. Whether to pursue a reappraisal — and how to present the market evidence — is a decision for the estate's attorney, not the broker.
Key facts
- Probate Code § 10309(a)(3): the offer must be at least 90 percent of the appraised value for the court to confirm a private sale.
- Two separate one-year tests apply: the appraisal date and the valuation date must each fall within one year before the confirmation hearing.
- Probate Code § 10503: the 90% floor, publication of notice of sale, and court approval of commissions do not apply to a sale made under IAEA authority.
- On a $1,000,000 estate appraisal, the lowest confirmable private-sale price is $900,000.
- § 10309(b)(4): the court may order a new appraisal if satisfied the latest appraisal is too high or too low.
- § 10309(c): where a probate referee made the original appraisal, that same referee may make the new one without a further court order.
How does the 90% floor interact with overbidding?
They are different mechanisms and they pull in opposite directions. The 90% rule sets the lowest price the court can confirm. The overbid procedure in section 10311 sets the minimum increment a competing bidder must clear at the hearing to displace the accepted offer. A property can sit at the 90% floor going into the hearing and end up materially higher after bidding, or draw no overbid at all.
For a fiduciary, the practical implication is that the confirmation-sale price is best thought of as a starting point that has to be defensible — both to the court and to beneficiaries who will see it. Accepting an offer at exactly 90 percent invites the question of whether the property was marketed hard enough.
What does this mean for how the property is priced?
In a confirmation sale, pricing has to sit above the statutory floor, be supportable against the estate's appraised value, and attract the specific subset of buyers willing to participate in a court process. That usually means real MLS exposure, professional photography, and a marketing period rather than a quiet off-market deal to the first neighbor who asks — because the record of exposure is part of what the court and the beneficiaries evaluate.
Selling a probate, trust, or fiduciary-held California property?
Sea to Sierras Realty, Inc. represents sellers exclusively, not buyers, and works regularly with executors, administrators, and successor trustees. Call (858) 248-1499 or email us.
This article is general process information for California property owners and fiduciaries and is not legal or tax advice. Whether the 90 percent requirement applies to your sale depends on the specific facts, the authority granted by the court, and the governing instrument, and the law changes over time. Consult a licensed attorney or CPA about your situation before acting. Sea to Sierras Realty, Inc. · Elizabeth A. Tresp, Broker · California DRE #02013661.