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Buying a probate property

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jwl83
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Buying a probate property

#190640

Postby jwl83 » January 2nd, 2019, 6:29 pm

First time buyer here, looking for advice... I'm interested in a property that is a probate sale. I've read up a little on pitfalls around this (mainly potential for sale to drag on while formalities are concluded). Before I follow-up with the estate agent, I thought I'd check here to gather any experience people here have had...

I understand a key event is probate being "granted". At what point is probate granted? Is it towards the start or the end of the process of dealing with the deceased's estate? I ask because the property has been on the market since the summer (of 2018) but I can't any record of this when searching the probate service (I can't post URLs, but Google "probate search service" and you'll see this page as the top result). Of course its possible the deceased is listed under another address, but it seems very likely from the property that is was their primary/sole residence. I will follow-up on this with the estate agent, but as they say, forewarned is forearmed.

As an aside, I believe the vendor is legally obliged to be truthful when answering questions about the property. In this case, the executors may be able to claim some degree of ignorance. Is the potential for problems here serious? I noticed a (relatively narrow) crack on an exterior wall - it's a Edwardian house and I expect it's quite normal. I asked the estate agent if they were aware of any history of subsidence - they said "that's what surveys are for". I would plan to conduct a survey if I have an offer accepted, but it would save everyone's time if any historical issues were put on the table. Am I expecting too much of the estate agent, or is it normal to ask this type of question (even if I accept the answer can legitimately be "not that we know of" / "we don't know")?

Thanks in advance for any advice.

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Re: Buying a probate property

#190650

Postby Lootman » January 2nd, 2019, 7:00 pm

My eldest son bought his first home as a probate sale. There were no undue delays or problems. No sale transaction can be completed if probate has not been granted so it would be unwise for any relative or executor to try and sell the property until the Grant is issued. How long that takes is variable but a few months is not untypical.

I've also sold a property as a probate sale, and you are correct that I can maintain credible deniability about any faults with the house as I cannot reasonably be regarded as having any personal knowledge of the place. Then again I'm not sure how important that is as few sellers are 100% honest anyway and it is really hard to prove what someone did or did not know. Estate agents are held to a higher standards but sellers can pretty much say anything.

So it is buyer beware, but then that is true of most sales. All that said, probate buys can be a bargain, as the executors may not hold out for a top top price. And homes that have been lived in by old folks for decades often need a complete remodeling, meaning that they can be cheap. The one my son bought was completely gutted down to the studs and then some. Took two years before he could move in.

jwl83
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Re: Buying a probate property

#190657

Postby jwl83 » January 2nd, 2019, 7:21 pm

Thanks Lootman - that's really useful.

It's sobering to think your son's house took two years before he could move in! Was that something he expected at the time of purchase or due to unforeseen issues? In the back of my mind, I'm trying to sanity-check there aren't more problems in the houses I'm considering than I realise!

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Re: Buying a probate property

#190666

Postby Lootman » January 2nd, 2019, 8:17 pm

jwl83 wrote:Thanks Lootman - that's really useful.

It's sobering to think your son's house took two years before he could move in! Was that something he expected at the time of purchase or due to unforeseen issues? In the back of my mind, I'm trying to sanity-check there aren't more problems in the houses I'm considering than I realise!

Ha, no, he guessed 4 months at the start. I knew that wasn't going to happen but figured he had to find out the hard way. To be fair he'd never done anything remotely like this before and it was a bigger job than I had ever taken on.

But yes, a useful rule of thumb is that it will take longer and cost more than you estimate. This assumes a total remodel rather than just updating and redecorating. He literally moved bathrooms and the kitchen, all new electrics, plumbing, heating, re-do of the roof etc.

It also depends on your local council. This was a Grade 2 listed building and that always adds delays and costs, as the council or national park can be very picky, neighbours can be difficult, and so on.

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Re: Buying a probate property

#190674

Postby Jabd2001 » January 2nd, 2019, 8:48 pm

I have also recently sold a probate property. We marketed it before probate was granted but could not complete the sale before the grant was obtained.
Granting of probate in our case took 6 months from date of death (basically you need to value the estate and pay any IHT due before you can apply for probate), but by the time we put the house on the market we were only about a month or so from being able to apply for the grant, so we were confident it wouldn’t hold up the sale. We were lucky that our property was pretty desirable and attracted many good offers with only a couple of weeks’ marketing, and we completed within about 6 weeks of it going on the market, and days after probate was granted.
We did plead ignorance about a lot of the questions about disputes, problems, boundary responsibilities etc as we simply didn’t know, not having lived in the property as adults.
So I’d say you just need to be a bit more careful about checking things out as you don’t have a purchaser to eyeball (and as a first time buyer you won’t have so much experience so all the more reason to be careful) - don’t skimp on the survey (don’t just use the mortgage company valuation but commission your own report), talk to neighbours if you can, make sure you get a good solicitor etc etc.

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Re: Buying a probate property

#190676

Postby Jabd2001 » January 2nd, 2019, 8:51 pm

Also don’t expect the estate agent to be very helpful, they are working for the vendor and not you.
If the executor(s) are around, you might be able to talk to them (if they are the deceased’s surviving children they may know something of the property) and you can often get more information if you are able to get past the EA to the actual vendor.

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Re: Buying a probate property

#190692

Postby Mike88 » January 2nd, 2019, 10:54 pm

I bought a probate property and all I recall was that a member of staff from the Valuation Office (District Valuer ?)visited the property after completion. There were absolutely no problems and can't envisage circumstances when issues could arise for purchasers only sellers if they were found by the probate authority to have sold the property below market valuation.

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Re: Buying a probate property

#190742

Postby Loup321 » January 3rd, 2019, 9:42 am

I bought a probate property a few years ago. The property was structurally sound, but in need of decorating. The vendors were incapable of filling in a simple form. Maybe they didn't know who the utility suppliers were, but as they were executors and joint owners prior to the mother's death (and the house had been empty so they had been paying the bills for over 6 months), I don't really believe that. They also said that they still had outstanding finance on the property and the sale price was not enough to cover that, which not many mortgage lenders would allow (but it was untrue anyway when I pushed the question). If they'd just got a solicitor to complete the form, things would have been simpler. We only had a member of the mortgage company's conveyancing team on our side, so they were not much help keeping things moving.

We moved in on the day we completed, and gradually decorated and unpacked boxes over 6 months or so. Fortunately, we have a spare room, so we could sleep in that while we got the main bedrooms decorated. We'd been staying with friends for 4 months before that, so we really did have time pressures to move in, and living in a poorly decorated disorganised mess was similar to squeezing everything into 2 rooms and having most of your favourite stuff in storage.

I honestly don't think it was any different from any other purchase (the only one I have direct experience of was a reposession property, which had its own quirks).

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Re: Buying a probate property

#190859

Postby modellingman » January 3rd, 2019, 5:19 pm

Buying a "probate" property is not much different to buying any other property. The main difference, of course, is that you are buying from the heir or heirs of a deceased person, most likely an old person. As other contributors have noted, this is likely to mean: the property may need some, perhaps considerable, modernisation, though this should reflected in the asking price; enquiries made of the seller through the conveyancing process are likely to be more "don't know" than normal; the process of getting an offer accepted might be a little more fraught if there are multiple heirs with conflicting views.

As to the rest, it is very much caveat emptor. Get a survey done, particularly if there is a crack visible. Tradespeople can also be useful. A decent electrician should be able to tell you pretty quickly whether a rewire is likely to be necessary and a heating engineer should similarly be useful for a view on the boiler and heating system, etc.

Probate is simply the process of a court approving a will as being valid. If there's no will there's a slightly different approach in that the law sets out who inherits. As part of the process, the executors of the will must produce a statement of the value of the deceased's estate after allowing for any claims against the estate (such as debts owed by the deceased). Any liability for Inheritance Tax is also identified. The process can be relatively quick but a lot depends on the complexity of the deceased's financial affairs and the urgency with which executors act. It is not possible to register a transfer of ownership at the Land Registry of a property that forms part of an estate until probate has been granted by the court.

As a first time buyer with perhaps relatively little experience of property, it is always worth bearing in mind that any work you do or have done will probably take considerably longer and cost more than you might expect. Also do the work in the right order.

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Re: Buying a probate property

#192040

Postby Clitheroekid » January 8th, 2019, 9:50 pm

jwl83 wrote:I understand a key event is probate being "granted". At what point is probate granted? Is it towards the start or the end of the process of dealing with the deceased's estate?

It's usually granted nearer the start of the process – it would typically be granted between two and six months after death for a reasonably straightforward, uncontested estate.

If it's been on the market since last summer probate should have been granted by now. The estate agent should know the position, and if they don't then the solicitors will definitely know, so it should be easy to find out one way or t'other.

As an aside, I believe the vendor is legally obliged to be truthful when answering questions about the property. In this case, the executors may be able to claim some degree of ignorance. Is the potential for problems here serious? I noticed a (relatively narrow) crack on an exterior wall - it's a Edwardian house and I expect it's quite normal. I asked the estate agent if they were aware of any history of subsidence - they said "that's what surveys are for". I would plan to conduct a survey if I have an offer accepted, but it would save everyone's time if any historical issues were put on the table. Am I expecting too much of the estate agent, or is it normal to ask this type of question (even if I accept the answer can legitimately be "not that we know of" / "we don't know")?

Executors typically know little about the house. Even if they’re the deceased's children they may only have visited infrequently, and may have been unaware of any problems because their parent(s) didn't tell them.

When I’ve acted for executors I’ve always advised them to err on the side of caution and say they don't know if they aren't 100% sure, and I'm sure this is general practice. It's common sense, as the information contained in a Property Information Form is relied on by the buyer, and can give rise to civil liability if it's incorrect. Even if the executors are the beneficiaries this is a bad outcome, but if they aren't beneficiaries it could be disastrous for them.

However, while this makes my job in selling a property easier the other side of the coin is that it can be very frustrating when acting for a buyer to receive a Property Information Form plastered with `Don't know' answers.

That's why it's a good idea to speak to the next door neighbours. They are usually only too pleased to speak to a prospective new neighbour, and you may well find out some useful information, for example that there is an unresolved dispute - most disputes are with the next door neighbour, and they will be positively delighted to let you know!

Neighbours will also tend to know about local proposed developments that may not be discovered by your solicitor.

Finally, I've always found that it's much easier to negotiate a reduction in a probate sale. This is partly because the sellers don't usually need the money to buy their next house, so that a reduction makes relatively little difference to them. This is particularly the case where there are several beneficiaries, as any reduction is shared between them, reducing the impact.

It can be useful to get hold of a copy of the grant of probate. This states the net value of the estate, so you can assess the value of the house as a proportion of the whole estate. The smaller the proportion the less a reduction in price will matter to the vendors. So if the estate is £600k and the house is for sale at £500k a £50k reduction would be a fair chunk of the estate. But if the estate is £2m the same reduction would be far less painful to accept.

Also, because the house is vacant it will by now have become a liability for the vendors. They will be paying council tax on it, they have the expense and worry of insuring it and maintaining it, and they will consequently be what are known in the trade as `motivated vendors'.

Overall, probate sales are potentially a good buy, but don't be afraid to negotiate hard. I obviously don't know where the house is, but in general terms the market is fairly soft, particularly if it's a fairly ordinary sort of house, and it's worth trying for a bigger reduction than you might have contemplated, especially if you're a cash buyer. 10% may not be over-optimistic for a quick deal.

And finally, good luck!


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