A “How To” guide to selling a property in probate.
When someone dies their estate, which includes their own home, other property, money, investments and other assets, must be disposed of in accordance with their will and the law. A bereavement can be a very emotional and stressful time in itself and juggling the administration of putting the deceased’s affairs in order can be all consuming.
A valuation for inheritance tax purposes will be needed in order to apply for probate and this can be obtained from a qualified estate agent or chartered surveyor.
The type of valuation required is defined in section 160 of the Inheritance Tax Act 1984 as being market value and the calculation is done using the following principles of a hypothetical sale:
• The ‘seller’ and ‘buyer’ are prudent and willing parties to the transaction.
• The property is offered for sale on the open market by whatever method of sale would achieve the best price.
• There are adequate publicity and advertisements for the sale to take place.
• The valuation should take account of the fact that there could be a “special purchaser”, i.e. someone that is willing to pay more than the market value because they have a special interest in the sale.
The advantage of instructing a professional estate agent to provide this for you at the start of the process is the advice they can give you to ensure the property achieves the best price once it launches onto the market. This gives you time to implement any of their recommendations before the photographs are taken and the marketing commences.
The answer to this is no, but you can commence the marketing, conduct viewings, and agree a sale subject to contract. The buyer can apply for a mortgage, arrange a survey and the process of conveyancing between buyer and seller can begin. Exchange of contracts cannot take place until probate is granted and buyers should be made aware of this when enquiring about the property.
Advice should be tailored to each property but these are our top tips:
• Keep the garden tidy
• Clear the property of furniture and personal possessions
• In winter drain down the central heating or preferably keep the heating on low. Buyers will get a ‘warmer feeling’ for the property
• Make emergency repairs if necessary (to prevent damp penetration and the condition of the property deteriorating – if necessary)
• Inform the insurance company the property is empty
• Install security lights on a timer or ask a friendly neighbour to pop in and pick up post, turn lights on and move curtains
• Redirect post
• Instruct a solicitor to act on behalf of the estate in the sale its important to be move ready speak to one of the team to be legally prepared.
If the property is in good condition then selling by private treaty on the open market in the normal way is likely to be recommended.
Many probate properties are homes with large gardens, needing refurbishment, renovation, or repair. This type of home attracts very good interest from buyers looking for a project and the added advantage of ‘No onward chain’ and are often the most suitable for sale by auction, achieving a fair market price with exchange of contracts guaranteed on the fall of the hammer.
If selling privately it can be difficult to prove a fair market value has been achieved, and satisfy all beneficiaries and Inland Revenue.
Book in your professional valuation with us and take the first steps to selling your home.
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