Selling a property during and when Probate has been obtained
Selling a property belonging to a close family member is traumatic at the best of times and the legal process can seem overpowering. To be able to handle the sale of a property you will have to be an executor of the will to be able to dispose of the home/property.
The timing of obtaining probate depends on the deceased circumstances and the complexity of their estate. Talking to your solicitor at an early stage to get an estimation of timings is crucial. Completing the various forms should be done quite quickly so the process can start and you will need to find out what documentation is required such as finding the deeds to the property, copies of mortgage documents etc.
You do not have to have probate before marketing a property. You can enter into a legally binding contract and exchange contracts subject to the grant of probate. If the property will show best in spring and summer you could achieve a better price than waiting for probate to be given and marketing in the depths of winter. However it is must be said it is easier to market a property once probate has been given as timings for buyer and seller are more certain and the length of time to obtain probate can be longer than predicted.
One of the most upsetting things is to sort through the house and its contents but this can be a useful part of the grieving process. When going through the house do not dispose of any documents that concern the property or its utilities. For instance keep information about septic tanks, planning permissions, Fensa certificates for new windows wood burner certificates etc.
We often get asked whether the furniture should be removed and the short answer is NO. An empty house is difficult to sell and strangely makes the house feel smaller. De-cluttering the house is a good idea and when doing this it is a good time to talk to siblings about what furniture and chattels each person wants. Many clients subtly put stickers on items so removers know what to do when the time comes.
Do Not cut off the utilities. Keep the heating ticking over and keep the last years utility bills as this is information that many buyers want to get an idea of the running costs of the house. Inform the suppliers of the death of the person and put the bills into the executor(s) names.
There may be quite a few beneficiaries of the estate but it is easier and more efficient if one person deals with the property sale. Different people talking to the solicitors and estate agent can confuse matters and can cause arguments during the sales process.
Valuing the property
You will need to have the property valued for Inheritance Tax purposes and this will be noted by HMRC. Your solicitor may want to have a Red Book Valuation of the property which means a formal valuation of the property and land carried out by a Chartered Surveyor for which there will be a charge, depending of the value of the property. However in most cases an estate agent letter with a price for the property is usually deemed acceptable and your solicitor may ask for 2 or 3 estate agents values. Some estate agents charge for this and other do it for free on the hope of getting the instruction to sell the property. The majority of agents will be sympathetic to your situation and will price the property accordingly but a word of caution, do not persuade the agent to price too low to try and pay a lower inheritance tax as HMRC will know what the property eventually sold for. Also if you are keeping the property to sell at a later date HMRC will look at the uplift in value from probate and the eventual selling price and levy capital gains tax on this figure.
Choosing an estate agent
Having an agent that is sympathetic to your situation helps as they will be able to handle the sale process empathetically. There are buyers out there looking for probate sales to buy a property at below market price and you should ask the agent how they qualify their potential buyers even before they view the property.
Do you employ the same solicitor that is handling the probate to do the conveyancing of the sale?
Although many people do it is not necessarily the right thing to do. Your solicitor handling the probate may not have a conveyancing department and may be located a long distance from the property or where you live. Choosing a solicitor that is local to the property has its advantages as they will know the area the property is located and the idiosyncrasies of that location. Instructing a conveyancing solicitor early, before you have obtained probate, also helps speed up the process as they will be able to assemble all the documents needed to prepare a contract. These documents are sometimes hard to find and may have to be collated from third parties which takes time.
Claire from Bartons Solicitors “Front loading the transaction by having everything to hand smooths the sale process immensely. Where you are selling a property as an executor you may not have everything to hand so finding a solicitor early can help get everything prepared and minimise delay and questions when a buyer is found. Your solicitor can help you locate certificates for work, planning documents, documentation relating to a previously deceased co-owner and the like in good time. Delay is the biggest threat to deals once they are put together.”
Please give our team a call to discuss the process of a Probate Sale and how we can help.
Miles Kevin MRICS
firstname.lastname@example.org 01803 505115