Pitfalls: Selling Probate Property – Executors Sales

How do we the executors deal with the House/ Flat/ Bungalow as Executors? I realise there is more too it than just selling – but what?

Free unoccupied house insurance during probate.* Executors sales (and all the work which comes before that) of property after a death need to be a priority. No one wants to inherit a house which has burned down and the insurers won’t pay out as the terms of the insurance have not been met by “negligent” executors!

Guess who is likely to be liable to the beneficiaries?  The executors!

So it is vital to check the insurance urgently, if you can find the documents, and arrange for the insurers’ requirements to be followed. They will usually include draining down all water, removing valuables and inspecting the property at least every 2 weeks with a formal record kept.  There is an easy way to do this if the property is to be sold, with free unoccupied property insurance.  See the form further down the page to get things sorted easily and rapidly and avoid the potential liability.

You will also need to inform the local authority and utility suppliers and obtain any balances as at the date of death.

Then you will need a Probate valuation & recommendation report.

Acquiring three independent valuations from trusted local estate agents (and an RICS probate valuation if required) is important. The service we suggest provides you with a full and impartial probate valuation report, compliant with section 160 of the inheritance tax act 1984, containing everything your solicitor will need to satisfy due diligence.

Many people just use a local estate agent, but there can be issues if a formal valuation is not obtained, most especially if the Taxman gets a sniff of potentially underpaid Inheritance Tax, or greedy relatives start arguing.

We really like this service, and if you are more than a few miles away, it could be very cost effective indeed, so well worth enquiring about.

Marketing the property

They will actively market the probate property to potential buyers through a network of three trusted local estate agents and keep the executor updated regularly. An energy performance certificate will almost certainly be required, which they can arrange but is an extra cost.

Monitoring,inspection and reports – relieving you of the responsibility

Inspecting empty properties throughout the process and providing regular update reports is a requirement to maintain valid insurance. They will keep you informed about the condition andcurrent meter readings, as well as any other information you need to know.

Securing a REAL sale

Financially qualifying all potential buyers is essential.  Dreamers can cost a fortune in legal fees and delays, only to find that they never stood a chance of getting a mortgage in the first place. If required, they can also arrange for 7 day notices in the press, and facilitate sealed bid offers where appropriate.

Progressing a sale

Driving your sale forward until completion, their dedicated sales progressors will manage the whole process, liaising with the purchaser and their solicitor to ensure that everything runs as smoothly and quickly as possible.

*They offer free insurance for vacant properties subject to their normal terms and conditions, which they will have happy to send. More details of their service and other matters underneath.

Enquire about the Executor Sales Property Service – let them have the worry!

More on the Probate Property Sales Service:

They are completely focused on property sales and valuation relating to probate and Trust matters. Committed to achieving the best results for their clients, the business has grown and developed on the strength and reputation of the service.

They offer a complete end to end service to sell properties quickly and for the best possible price. They also offer free comprehensive vacant property insurance for all property sold and their ‘Extra Solutions’ department can help with matters such as clearance, property and garden maintenance, car sales, drain-downs and much, much more

they offer a more cost-effective alternative to RICs and Estate Agents Valuations by way of the Property Valuation Appraisal which is HMRC compliant, covers Section 160 Inheritance Tax act 1984 and Taxation Chargeable Gains Act 1992.

The service is bespoke and unique end to end service from property valuation through to sale completion. The business prides itself on working in teams as opposed to call centres, so each customer is offered a direct contact point and is updated regularlythrough a thorough marketing and sales progression report.

The additional benefit of using their exclusive and vital services to ensure a sale, also make the business stand out from the rest. To help ensure that they are able to maintain their incredible record of selling a house within eight weeks, they also offer:

  • Free Vacant Property Insurance for all properties they market
  • Vacant property inspections.
  • Clearance / Professional Clean including ‘Deep Clean’
  • General property and garden maintenance.
  • Drain downs.
  • Redbook valuations of jewellery, fine art, antiques etc.
  • Sale/ scrapping of vehicles.
  • Land Valuations
  • Lock changes/ security

Key points to consider when selling the deceased’s property as executor of an estate.

The executors are responsible for winding up the deceased’s estate and carrying out the terms of their will. Unless the beneficiaries under the will wish to have the property transferred into their names, the executors will need to sell it.

Some of the issues executors should consider are:

Grant of probate

If the deceased owned property in their sole name, a grant of probate will be needed before the executors can sign the contract to sell or transfer the property.  

Don’t underestimate the time for obtaining the grant, especially if you are intending to apply for the grant personally, rather than through a solicitor and/or if inheritance tax (IHT) is payable. Even in a straightforward estate, it can take two to three months to obtain the grant.  Nothing to stop you putting it on the market, but buyers can get fed up with waiting!

Valuations

You,  the executors need to complete either a return of estate information form or an IHT account (depending on the value and nature of the estate), detailing all of the deceased’s assets and liabilities, with date of death balances or valuations. You can get two or three estate agents’ valuations and take the average as the value of the property, or obtain a surveyor’s valuation. The valuation supplied under the service detailed above is the best option, and is much less likely to lead to disputes with HMRC.

Check the title and locate the deeds – it could be a surprise

Check the title to the property. If the property is registered with the Land Registry, this should be a relatively straightforward matter of downloading a copy of the title entries and plan. Check that the property is in the deceased’s name, watch out for joint owners and mortgages and that the plan shows the full extent of the property.  You may discover that there is an equity release mortgage or even that the home is no longer owned.

If it is not registered, perhaps the deceased had owned it for many years, you or your lawyers will need to find the paper title deeds. They may be held in safe custody by the solicitor or bank, or with the deceased’s papers at home. Once found, the First Registration process must be completed.  We can certainly point you to someone who can help with that, and or probate.

Restrictions and defects

Ask a solicitor to check the title entries and plan, or the paper title deeds, for restrictions affecting the property, or defects in the title. These may need to be dealt with before the property can be sold. It is common to find that the property was never transferred to the deceased on the death of their spouse.  That may mean extra work and delay for any potential buyer, so get that sorted as soon as possible.

Realistic timescales.

Estate agents usually suggest that they have a potential buyer already, or that the property should be placed on the market immediately. You can certainly put it on the market, but that is all you can do until the grant of probate has been obtained. 

The executors must also be aware that the deceased’s property will need to be cleared of all its contents before the property is sold and again – something that can be quite time consuming and is a service offered by people above.

Capital gains tax.

If the house is not sold until some time after the grant has been issued, the value of the property may have increased above the date of death value, and this could lead to the executors incurring a CGT liability. For the year of death and the following two years, the executors have a CGT allowance to offset this – but there could still be tax to pay. There are potentially ways to reduce that. 

If the estate is subject to Inheritance Tax and the property is sold before HMRC has issued tax clearance, HMRC will wish to take the sale price as the date of death value, so additional IHT may be payable on any increase in value. If the property has sold for less than the date of death value, the executors can reclaim the overpaid IHT.