A California escrow involves a probate sale where the court has confirmed the sale at $475,000. During the court confirmation hearing, another bidder offers $510,000, which meets the overbid requirements under California Probate Code. What happens to the original escrow?
Correct Answer
B) The court may accept the higher overbid, and the escrow officer must adjust the transaction to reflect the new buyer and price if the court confirms the overbid
Under California Probate Code §10311, the court confirmation hearing allows overbidding. If the overbid meets the minimum requirements (typically the original price plus 10% of the first $10,000 plus 5% of the remainder), the court may accept the higher bid. If the overbid is accepted, the escrow officer must revise the transaction to reflect the new buyer and purchase price. The original buyer's deposit is returned.
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