Your Probate questions: what price can executors sell a house for?
We’re having a family argument about what price executors can sell a house for. I along with my sisters are sole beneficiaries of my late Father’s will, primarily this involves a house that has to be sold. However my sisters are executors of the will and therefore not taking advice entirely on the house value i.e. pricing too high. I am more realistic with the value and would like to know where I stand on this issue, is it up to the executors to decide value of the house or should it be the beneficiaries of the will?
Answer to your probate question: what price can executors sell a house for?
It is up to the executors to put a price on the house. If it is too low HMRC could ask the District Valuer to give a valuation and the executor would be responsible for the penalties it he had valued it too low and underpaid tax. If it is ridiculously low, then the beneficiaries might decide to sue the executors for not doing their job properly if they can prove loss. The executors must aim to get a fair price for the house. That said, beneficiaries often tend to be keen for the house to be sold pronto, so “executors sales” are often a little under full market value to attract buyers who can go ahead immediately.
If the executor values it too highly, and as a result there is an undue delay in selling it he has to account to the beneficiaries. If as a result the beneficiaries end up with too little they could sue the executor for their loss, but they would have to prove what that loss is in cash terms. That is not too difficult these days! Checking if the price the executors are asking for a house is at least in the right ballpark is relatively easy these days.
But if the executors want to do their job thoroughly, they would ideally get a paid formal valuation from a Chartered Surveyor. That said, getting three valuations from local estate agents is a perfectly sensible way to proceed. Zoopla and many other property sites also have interesting comparisons. But other houses in the same street may be very different for the one your executors are selling. If all the estimates are wildly different, or seem unreasonably low, maybe take another opinion. But an executor who prices at the top end will usually be seen as trying to do the right thing for the beneficiaries, as long as they listen to advice on then reducing the price. As an insider tip, they should rehash the details, put in a different photo and folio number when revamping details. It is surprising how often a changed set of property details will awaken interest in previously uninterested buyers.
Probate Question: valuation of house contents.
For probate please advise me on what contents need to be valued in the home.
All our furniture, carpets are many years old – how does one value items of little value. We cannot give our teak furniture away. Does one add crockery and such like. Ornaments possibly, and here quite a few items in the house are my own personal possessions and not my late husbands. I am finding this part of probate very difficult. Valuing the house was not a problem.
Probate Answer: how to value house contents.
If the current death may create an Inheritance Tax bill, get a professional value for house contents.
If it is possible that Inheritance Tax might be payable at some time in future, then you should obtain a reasonably accurate valuation – you may be surprised that some of your “old” bits and pieces are actually antiques. If it is possible any of the house contents might be valuable, a paid valuation might be wise to avoid HMRC penalties or allegations of selling items below value or favouritism in giving some folk valuable antiques and others throwaway trash. The Taxman and beneficiaries are far less likely to question a written professional valuation. Some Chartered Surveyors may provide this service or maybe a member of the National Association of Auctioneers and Valuers.
If there is nothing of value at all, then just make a guess at what it could be worth – a couple of thousand pounds perhaps. What you are looking at is half of the contents, or the value of these which belonged to him, plus half the value of joint assets. And that does include the cutlery, crockery etc, though in most cases that will be of negligible value.
If everything is left to you LEGAL spouse, then the valuation may be almost irrelevant, but you still need to retain records, copy Will and HMRC forms to prove that the Transferable Nil Rate Band for Inheritance Tax will be available when you die, and leave up to £650,000 free of IHT rather than just £325,000 (you may have won the lottery in the meanwhile!) (Or more with the new Property Nil Rate Band.)
Do bear in mind that the value for insurance purposes is based on new for old – so a really old and tacky sofa could be worth nothing – but if it was high quality it might cost £2000 plus to replace, and that would be the insurance value.