If you are looking for a house to buy, you may come across some properties that are in probate. What does this mean, and how does it affect your purchase?
Here, the Property Road team explains what probate is, how does buying a probate house looks like, how it differs from buying a house not in probate, and what are the pros and cons of each option.
What is probate?
Probate is the legal process of dealing with the estate of someone who has died, which may include their property, money, and possessions.
Essentially, probate gives someone the legal right to carry out the wishes in the person’s will, or to administer the estate if there isn’t one.
It is worth noting that probate rules are different in Scotland and Northern Ireland, and here we look at what happens in England and Wales.
What is a probate property?
A probate property is a home that is part of the deceased person’s estate and is being sold by the executor or estate’s administrator.
The executor or administrator is the person who has been granted probate or letters of administration by the court.
They are responsible for valuing, selling and distributing the estate’s assets according to the deceased person’s will or the law. That means they are the ones responsible for selling the home and getting a realistic price for it.
How to buy a probate property?
Buying a probate property is similar to buying any other home, but there are some differences and challenges that you should be aware of. Here are some steps to follow when buying a probate property:
- Find a probate property that suits your needs and budget. You can search online, contact estate agents, or look for notices in local newspapers.
- Arrange a viewing of the property and inspect it carefully. Probate properties are often sold ‘as seen’, which means they may be in poor condition or need repairs. You should also check if there are any outstanding debts or charges on the property, such as mortgages, loans, or utility bills.
- Make an offer on the property and negotiate with the seller. They may be more willing to accept a lower offer if they want to sell quickly and avoid paying maintenance costs. However, they may also have a minimum price that they need to achieve to cover the debts and expenses of the estate.
- Arrange a survey – it would be a good idea to have a full survey carried out to find out what the problems might be – and a valuation of the property to confirm its condition and market value.
- Instruct a solicitor or conveyancer to handle the legal aspects of the purchase. They will check the title deeds, contracts, searches and other documents and advise you on any issues or risks. They will also liaise with the seller’s solicitor or conveyancer and exchange contracts when both parties are ready.
- Complete the purchase by paying the agreed price and any fees. The seller will then transfer the ownership of the property to you and hand over the keys.
What are the pros and cons of buying a probate property?
Buying a probate property can have some advantages and disadvantages compared to buying a house not in probate. Here are some of them:
- You may be able to buy a probate property at a lower price than its market value, as the seller may be motivated to sell quickly;
- You may have less competition from other buyers, as probate properties are not widely advertised or marketed;
- You may find a unique or characterful property that has been in the same family for generations and has not been modernised or altered.
- Buying a probate property can take longer than buying a house not in probate, as there may be delays or complications in obtaining probate or selling the estate;
- A probate property purchase can be riskier as there may be hidden problems or liabilities with the property that are not disclosed by the seller;
- It could be more costly buying a probate property as you may have to pay for repairs or renovations.
Benefits of buying a probate house
While we have discussed the pros of purchasing a probate property above, there are other advantages of investing in these over traditional properties being put up for sale. They include:
- Move-in ready condition: Executors handling probate sales strive to liquidate the deceased’s assets quickly, resulting in properties that are typically clean and well-maintained
- Extras: Probate houses tend to include more of the fixtures and fittings compared to non-probate homes on sale. Executors may sell off additional items from the estate before distribution to beneficiaries, providing buyers with the opportunity to negotiate for furniture and other belongings at no or little cost.
Potential issues when buying a probate house
It is worth considering the issues that arise for the executor – this will help explain the potentially frustrating delays in what can be a long and involved process.
That’s because there are numerous challenges, from securing a buyer to navigating beneficiary disputes, so understanding the intricacies of probate sales is essential for both executors and potential buyers. The challenges in selling a probate house include:
Obtaining a fair market value
Executors have a duty to secure a fair market value for estate assets, so this may take longer to find a suitable buyer.
Court approval delays
The probate court must approve any sale, which can take months and lead to frustration for buyers who have made an offer on the property.
Conflicts may arise if one or more beneficiaries object to the executor’s handling of the estate. This could result in further delays and complications, as beneficiaries may appoint a new executor or dispute certain decisions.
This is where using an experienced estate agent in probate will be invaluable in managing the sale.
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What are some special considerations for buyers?
If you are interested in buying a probate property, you should consider the following factors before making an offer:
- The seller may not have much information or knowledge about the property, as they may not have lived there or visited it for a long time. You should do your own research and due diligence to find out as much as you can about the property and its history.
- The seller may not have the authority or the ability to accept your offer or complete the sale until they have obtained probate or letters of administration. You should check the status of the probate application and be prepared to wait for it to be granted.
- The seller may have to obtain the consent or agreement of other beneficiaries or creditors before they can sell the property. You should ask the seller who else is involved in dealing with the estate and how they will communicate with them.
- The seller may change their mind or withdraw from the sale at any time before contracts are exchanged. You should not rely on verbal agreements or promises and always get everything in writing.
Why buyers of probate houses need a survey
Regardless of the type of property you’re considering, obtaining a thorough survey is crucial to ensure the home’s condition meets your expectations.
Identifying potential issues early on can save you time and money by addressing them before they escalate into costly problems. Key aspects to examine during a property survey include:
- Structural integrity: Assess the overall stability and soundness of the building.
- Roof condition: Inspect the roof for any signs of damage or leaks that may lead to costly repairs.
- Heating system and appliances: Verify that the heating system and appliances are functioning properly and efficiently.
- Damp and mould inspection: Pay particular attention to older properties, as dampness and mould can cause significant damage and expensive repairs if left untreated.
By prioritising a thorough property survey, you can protect your investment and enjoy peace of mind knowing you’ve made an informed decision.
Questions and Answers for buying a house in probate
Is stamp duty applicable when purchasing a probate property?
Usually, when you buy a probate property, you must pay the stamp duty land tax (SDLT). And, if this isn’t your only property, you’ll need to pay an additional 3% in stamp duty.
Are probate house valuations lower?
Some estate agents provide ‘probate valuations’, but these are typically no different from the standard valuations they perform before listing any property for sale.
Who holds ownership of a property during probate?
The answer is the estate’s executor, or the individual granted probate – although they don’t technically ‘own’ the property as they won’t possess the title deed. They have the legal authority to sell the property on behalf of the deceased’s estate.
Understanding the Grant of Probate process
Accelerating the application for the grant of probate is not possible, so you must first ask the seller whether they possess the Grant of Probate. If yes, there won’t be any time delay unless they’ve applied but haven’t yet received the Grant of Probate. If the answer is no, then ask if they have submitted an application to the Probate Registry.
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Buying a house from probate
Buying a probate property can be a good opportunity to find a bargain or a unique home, but it can also be a complex and challenging process that requires patience and caution.
You should always seek professional advice and guidance from a solicitor or conveyancer, a surveyor and estate agent before buying a probate property.
It is also important that you are respectful and sensitive to the seller, who may be dealing with grief and loss as well as legal and financial matters.
The bottom line is that buying a house from probate means you can buy a lovely home for less, but the process is a bit more involved than when buying a house normally.