FAQs on the buying and selling of Probate properties
The purchase and sale of a Probate property is slightly more complicated than ordinary property transactions. Here are some of the questions that are most commonly asked in relation to property being left in a person’s will.
What is probate?
Probate is the process through which someone is given permission by the court to deal with the estate of a deceased person, including the collection of all of their assets, the payoff of any debts and the distribution of the assets to the beneficiaries who are entitled to them.
What happens when a property owner dies?
When a property owner dies, their will should specify a named person to deal with the estate, or the deceased’s next of kin in the absence of a will. This person will assume responsibility for the legal affairs, often obtaining ‘Probate’ or ‘letters of administration’ enabling them to act as the personal representative (PR). Probate also gives the PR the right to transfer or sell the property.
In the event that the property is to be sold, the Probate will give the PR the authority to do this in compliance with the will’s terms. Should the property have been registered with the deceased person as the sole owner, the PR may assent the property to the person inheriting it or transfer the property to someone else.
What happens after the death of a property owner depends greatly on what the beneficiaries plan to do with the property. There is no need in this situation to rush into a decision on what to do with a property, and indeed, it may not be dealt with until several weeks following the person’s death and the reading of the will.
How easy is it to sell a Probate property?
This depends on the property itself. However, with about one in 10 houses on the market reportedly being Probate properties, they are increasingly familiar to prospective home buyers, who are typically attracted to them due to their slightly more affordable prices and the renovation opportunities that they may afford.
What is the cost of selling a Probate property?
The sale of a Probate property should not incur any greater legal costs than those for the sale of any other property. However, there are certain other costs that the inheritor may need to pay for a Probate property, such as for clearance of the house prior to selling, or for ‘vacant property insurance’, a necessary expense for a property left unoccupied for more than 30 days.
Other potential costs associated with Probate property include valuations, with at least three independent valuations recommended in order to determine the appropriate Inheritance Tax for a property. Finally, maintenance costs should also be factored in by the new owner, particularly during the winter when the house is at risk of damp if it is not heated regularly.
What if the sale price differs from the valuation?
If the amount for which the property sells is significantly higher than the Probate valuation in the inheritor’s tax return, they may be required to provide evidence of what caused this to happen. If at least three independent valuations have been carried out or improvements have been made to the property, it shouldn’t be necessary for any additional tax to be paid.
The inheritor is able to apply for a tax rebate if they sell the property within four years of the date of death for a price far below the valuation.
Can an inherited property be sold prior to Probate being granted?
In a word, no. You will need to await the completion of the Grant of Probate, the exception being if your name is already on the deed, such as if you are the deceased person’s spouse. Given that this process only usually takes about eight weeks, many people begin advertising their house for sale in the meantime. However, the sale cannot be completed until the seller has received the Grant of Probate.
How long is the wait for the Grant of Probate?
This depends on the circumstances. In the event that the estate is non-taxable – with no Inheritance Tax due – a wait of about six weeks is typical. For a taxable estate – where Inheritance Tax is due – the inheritor may not obtain the Grant of Probate for 12 weeks. However, in more urgent situations such as court cases, the wait could be as short as two weeks.
What documents are required for Probate?
Prospective applicants for Grant of Probate will need to give their solicitor certain documents so that the value of the estate can be figured out. These typically range from the death certificate, the original will and the deceased person’s NI number, right through to property deeds, mortgage information and bank society statements. While some of these documents may already be in the deceased person’s files, others may need to be requested from various organisations by you or your solicitor.
I don't have a copy of the will. How can I obtain one?
You could start by looking through paperwork in the inherited property; check files and desk drawers. The deceased's bank might have a copy for safe-keeping; the solicitor that helped the deceased to write the will might have a copy, too.
When looking for the will, you should remember that, unless you are an executor and have been given a Grant of Probate, you will not be entitled to see it. After obtaining the Grant, you can move ahead with responsibilities including seeking a probate valuation of property.
What mistakes are typically made by a novice in handling probate?
Executors lacking experience of handling probate often underestimate how much time and work this responsibility requires. They may also fail to realise the need to maintain clear records, which are useful for keeping track of the process and the court, creditors, or beneficiaries could ask to see.
If the inheritance includes a lot of cash, a novice could be pressured to begin distributing money to beneficiaries too early. This could become highly problematic if Inheritance Tax payments still need to be made before the selling of other assets or if the estate is, unknown to the executor, indebted.
A novice executor can also be overly trusting; for instance, they could allow a relative to take away an asset which, without providing any evidence, they claim to be entitled to. The executor could also misunderstand the will's meaning, the proper application of the law, and exactly what assets should go to what beneficiaries. Executors with any doubts should seek professional advice.
Can you provide a property valuation for probate?
If you are a beneficiary of an inherited home, we can provide a probate property valuation for free. However, as previously detailed, it is recommended that you obtain at least three independent valuations for a property in order to determine how much Inheritance Tax is payable.
How can I protect the property before it is sold?
While we can purchase your probate property within 48 hours, this is only after you have obtained the Grant of Probate. As we have previously mentioned, it can take up to 12 weeks for you to obtain this. Therefore, you should think carefully about how to protect the property in the wait for it to be sold; ensuring its proper protection is part of properly administering the deceased's assets.
You should ensure that the property and its significant assets are insured, particularly because previously enacted insurance may have lapsed upon the deceased's death. Reach existing insurers to confirm the position and prepare to take out additional insurance if necessary.
Make sure that the home, if no longer occupied, is properly secured. If it contains any especially valuable items, you could remove them to keep them safe elsewhere. If the property has a garden, you could choose to employ a gardener. This can help ensure the property's good condition and, therefore, higher price when it is sold.